Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — BOARD OF TRADE

World Trade

Mr. J. H. Osborn: asked the President of the Board of Trade if he will give his estimate of the value of world trade in 1969 compared with each of the previous three years; what has been the value, with export and import, and percentage of Great Britain's share in it; and what estimates have been made in respect of 1970 based on these trends.

The President of the Board of Trade (Mr. Roy Mason): With permission, I will circulate the latest available figures in the OFFICIAL REPORT.
I do not wish to venture precise forecasts of the out-turn for this year as a whole or for 1970. However, after its recent exceptionally rapid expansion, I expect that world trade may soon grow somewhat less strongly, and that this could have some effect on the growth of our exports. Imports are likely to show some increase as the economy expands.

Mr. Osborn: Can the President of the Board of Trade give some estimate of the

January—June (a)




1966
1967
1968
1968
1969(b)


TOTAL EXPORTS (f.o.b.)

U.S.$thousand million


World (c)
…
181·4
190·5
212·9
101·8
116·3


United Kingdom
…
14·7
14·4
15·3
7·5
8·4


— per cent share
…
8·1
7·5
7·2
7·4
7·2


EXPORTS OF MANUFACTURES (d) (f.o.b.)



Main manufacturing countries (e)
…
92·6
99·1
114·2
54·3
64·0


United Kingdom
…
12·0
11·8
12·7
6·2
7·0


— per cent share
…
12·9
11·9
11·1
11·5
11·0


TOTAL IMPORTS (c.i.f.)



World (c)
…
192·1
201·8
224·5
108·3
122·7


United Kingdom
…
16·7
17·7
19·0
9·4
10·0


— per cent share
…
8·7
8·8
8·4
8·7
8·2

(a) Not seasonally adjusted.

(b) Preliminary estimates.

(c) Excluding the Sino-Soviet countries.

(d) Section 5 to 8 of the Standard International Trade Classification.

(e) U.K., U.S.A. Canada, Japan, E.E.C. countries, Sweden, Switzerland.

extent to which a slowing down in the growth of world trade would affect our exports, and the extent to which our increased exports have been due to devaluation?

Mr. Mason: It is too soon to give an estimate regarding devaluation. One could give only a rough guess as to how world trade might move in the next year or so, but what is pleasing is that during the course of expansion in world trade we have this time managed to maintain our share whereas previously when world trade grew we actually fell back.

Mr. Cant: I appreciate that my right hon. Friend is too much of a gentleman to remind the Opposition that Britain's share of world trade fell from 25 to 17 per cent. from 1951 to 1964, but will he accept that this is no longer a proper yardstick and that exports per 1,000 of the population give a more accurate guide?

Mr. Mason: That is a better indicator, but the Question refers to the first point which my hon. Friend mentioned.

Mr. Higgins: The right hon. Gentleman has made the extraordinary statement that it is too soon after devaluation to make an estimate of what effect it has had. We ought to have a reasonable estimate by this stage of what the elasticities were in response to the change in relative prices of exports and imports, ought we not?

Mr. Mason: I still think that it is too soon to say, after about two years, or to give an accurate forecast of the real effects.

Following is the information:

Overseas Marketing Corporation

Mr. Bruce-Gardyne: asked the President of the Board of Trade if he will give the number and aggregate value of contracts between United Kingdom manufacturers and foreign buyers which the Overseas Marketing Corporation has been instrumental in promoting and the average size of the United Kingdom firm concerned.

Mr. Mason: The Overseas Marketing Corporation is established as a private limited company, and it would, therefore, not be right to disclose details concerning the commercial activities of the corporation.

Mr. Bruce-Gardyne: Come now—this body has already taken upwards of £200,000 of preferentially valued loan capital from the taxpayer. Is not the taxpayer entitled to know what is being done with the money, and the extent to which he is getting value for the money expended on his behalf?

Mr. Mason: As I have said, it is a private limited company. If the hon. Gentleman wanted more information, I would advise him to go to the company. It is true that it has drawn £275,000, and so far it has had a measure of success in Europe.

Mr. Ridley: Can the right hon. Gentleman tell us what return we are likely to see on the £275,000 which has been drawn? This is what is of interest to the taxpayers who put up the money.

Mr. Mason: That is not quantifiable just yet. The O.M.C. is an experimental initiative, and it has spent some time helping manufacturers who lacked marketing resources and expertise in identifying opportunities for them abroad and finding them markets.

Coach Passengers (Insurance)

Mr. Gwilym Roberts: asked the President of the Board of Trade what study he has made of the evidence supplied to him by the hon. Member for Bedfordshire, South showing that passengers in coaches were frequently not fully covered by insurance unless the liability of the coach company could be fully proved; and if he will take steps to close

this type of insurance loophole in this and other forms of transport.

The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody): The liabilities of coach operators for damage to the luggage of their passengers are usually governed by the conditions of carriage. It is for the operators to decide whether to insure against these liabilities. In general, the conditions of carriage, not the degree of insurance, limit the extent to which claims by passengers are entertained.
The Law Commission is at present considering, in relation to contracts for services generally, how far it should be permissible to contract out of common law liabilities.
I shall write shortly to my hon. Friend on the matter.

Mr. Roberts: I earnestly urge my hon. Friend to expedite the matter as much as possible. Does she realise that 99 per cent. of the general public who go abroad in a coach believe that their luggage is covered by the company in case of accident? Can she tell us what the position is in British Railways and bus companies?

Mrs. Dunwoody: It may well be that passengers are not fully cognisant of the terms under which their luggage is carried. In general, I think that a lot of people choose to insure their luggage individually. Questions about British Rail are for my right hon. Friend the Minister of Transport.

Gross National Product and Imports

Mr. Michael Shaw: asked the President of the Board of Trade what estimate he has made of the relationship between the size of the gross national product and the level of imports; how this compares with the relationship in other equivalent countries; and what evidence he has that this relationship is changing.

Mr. Mason: At current prices, our imports from 1958 to 1968 have varied between 14 and 16 per cent. of the gross national product. There is no discernible trend in the proportion, which is similar to that for the European Economic Community. In volume terms the proportion has risen, but more slowly than in all


other comparable countries. With permission, I will publish figures in the OFFICIAL REPORT.

Mr. Shaw: I thank the right hon. Gentleman for the figures I am to receive. Is it the fear of a sudden rise in the ratio of imports that continues to prevent

TABLE A


IMPORTS AND G.N.P. AT CURRENT PRICES





Ratio of imports to G.N.P. at current market prices (per cent.)


Year
United Kingdom
Other EFTA countries
EEC countries
Canada
United States
Japan


1958
…
…
14·6
22·6
14·9
15·4
3·0
7·9


1959
…
…
15·0
22·8
14·6
16·0
3·3
8·6


1960
…
…
16·0
24·6
14·9
15·3
3·0
8·7


1961
…
…
14·7
24·6
14·5
15·3
2·9
9·1


1962
…
…
14·2
24·0
14·4
15·3
3·0
7·7


1963
…
…
14·2
23·6
15·0
15·2
3·0
8·5


1964
…
…
14·9
24·5
15·0
15·9
3·1
8·2


1965
…
…
14·1
24·4
15·2
16·5
3·3
7·6


1966
…
…
13·8
23·9
15·5
17·4
3·5
7·6


1967
…
…
14·1
23·5
15·0
17·6
3·5
7·8


1968*
…
…
16·1
23·2
15·6
18·4
4·0
7·3


1969 H.1
…
…
16·0*



* Provisional estimates.

TABLE B


INCREASE IN IMPORTS AND G.N.P. AT CONSTANT PRICES, 1958 TO 1968


(Volume Index Numbers 1958 = 100)



United Kingdom
Other EFTA countries
EEC countries
Canada
United States
Japan


Imports (1958=100)
174
220 to 272
257 to 328
209
237
433


G.N.P. (1958=100)
137
151 to 179
154 to 173
159
158
285


Ratio Imports/G.N.P.
1·27
1·36 to 1·80
1·56 to 1·91
1·32
1·51
1·52

British European Airways (Aircraft Requirements)

Mr. Onslow: asked the President of the Board of Trade what recent discussions he has had with the Chairman of British European Airways on the airline's future requirements for aircraft.

Mr. Mason: None, Sir, yet.

Mr. Onslow: Will the right hon. Gentleman confirm from his most recent discussions with the British European Airways Board that it still wishes to see B.E.A. operating aircraft of British manufacture, that it wishes to buy new aircraft in that category, and that it has his support in this?

Mr. Mason: I am awaiting its proposals. I cannot go any further than

the Government from pursuing a policy of expansion?

Mr. Mason: Not at all. There has been only a moderate increase in imports during the course of the year.

Following is the information:

that at present, but I shall certainly have a sympathetic ear when they come.

Mr. Maclennan: Will my right hon. Friend have discussions with B.E.A. about what aircraft is to take the place of the Viscount, particularly in its use in the Highlands and Islands of Scotland?

Mr. Mason: I have not been approached on that matter so far, and I have not made any arrangements for meeting B.E.A. on the subject.

Aircraft Noise (International Certification Standards)

Mr. Onslow: asked the President of the Board of Trade what progress he has made in his discussions with the United


States and French authorities on international noise certification standards for aircraft; and if he will make a statement.

Mr. Corfield: asked the President of the Board of Trade if he will indicate the results of his discussions with representatives of the Government of the United States of America in regard to maximum permitted noise levels of both subsonic and supersonic aircraft, both in flight and at landing and take-off, operating between the United Kingdom and the United States of America.

Mr. Barnes: asked the President of the Board of Trade if he will make a statement on the progress of the proposals for an international aircraft noise certification scheme, which Great Britain, France and the United States of America are submitting to the International Civil Aviation Organisation.

Mr. Mason: The progress of tripartite work on noise certification standards for the next generation of subsonic jet transport aircraft has been reported to the International Civil Aviation Organisation. This work will be discussed at an I.C.A.O. Special Meeting on Aircraft Noise next month. We shall press for early agreement on a practicable international scheme to secure the progressive introduction of the much quieter aircraft which are now technically possible.
It is still too early to make proposals for noise standards for new types of supersonic aircraft.

Mr. Onslow: Does the right hon. Gentleman agree that the House would welcome the opportunity to debate the matter fully? When he is ready to introduce proposals, we shall want to be satisfied with the adequacy of all his arrangements to control and diminish aircraft noise, and shall want a full day for that.

Mr. Mason: That is a question for my right hon. Friend the Leader of the House. I shall take a keen personal interest in the matter, as I have since I opened the first international noise conference at Lancaster House in 1966.

Mr. Corfield: Whilst I support my hon. Friend's demand for adequate discussion, will the right hon. Gentleman bear in mind that some of the technical modifications proposed could inflict propor-

tionately much greater expense on our aircraft industry than that of the Americans and other countries?

Mr. Mason: Yes, Sir. That is something we shall have to keep in the forefront of our minds. Three major nations are involved, and we shall have to see to what extent the cost affects individual States.

Mr. Barnes: Many people living near London Airport have been greatly encouraged by the high hopes my right hon. Friend has expressed about noise certification in his booklet "Action Against Aircraft Noise." Will he be more specific and say by what year he expects, say, 50 per cent. of aircraft using London Airport to be noise-certified?

Mr. Mason: I am sorry that I cannot be more specific than I have already been. We shall have to await the international discussion at I.C.A.O.

Mr. Rankin: Does my right hon. Friend agree that we produce one of the quietest engines that has ever taken to the air, the RB 211, and that it is the type of engine we would be better using ourselves, even though we earn a lot of money by selling it to America?

Mr. Mason: The RB211 does not power present-day aircraft. Aircraft which should be covered and therefore should be quieter would be the Lockheed 10–11, the BAC3–11, the DC10 and the European Airbus.

Board of Trade Journal

Mr. Sheldon: asked the President of the Board of Trade what changes he proposes to make in theBoard of Trade Journal.

Mrs. Gwyneth Dunwoody: To improve the Journal's usefulness to its readers, changes of content and editorial technique are under discussion. These follow a readership survey conducted last year. The Journal will continue to emphasise matters concerning exports and provide a vehicle for a broad range of official information affecting trade and industry.

Mr. Sheldon: Since so many of the activities of the Board of Trade have been hived off to other Departments, is


it not clear that there is a need for another publication which will reflect the wide-ranging relationship between Government and industry, and that this might be brought about by an expansion of the Board of Trade Journal or even by another journal?

Mrs. Dunwoody: The Board of Trade remains a very important Department in Whitehall, covering a great many vital subjects. Although the Board of Trade Journal has not yet reached the point where it interprets statistics as being someone's bust measurement, I think it will contain some rather useful bits of information.

Mr. Wingfield Digby: As a keen reader of this publication, might I ask that the trade statistics be brought a little nearer the beginning, instead of being tucked away near the end?

Mrs. Dunwoody: The hon. Gentleman is one of an estimated readership of 33,600 people, all of whom, very interestingly, appear to be in influential positions. We shall certainly take note of his point of view.

Apples

Sir G. Nabarro: asked the President of the Board or Trade what value of apples have been imported into Great Britain during the 12 months ended 31st October or the latest convenient date: and what contribution to the policy of imports substitution has been made by British apple growers in the period stated.

Mrs. Gwyneth Dunwoody: Information on imports of apples for the twelve months ending 30th September, 1969, may be derived from the issues of the Overseas Trade Accounts for December, 1968 and September, 1969 (page 19). October figures are not yet available. As imports of apples which compete with the domestic crop have for many years been subject to quota restrictions, any increase in consumer demand during the home marketing season is met by domestic supplies.

Sir G. Nabarro: Is it not the fact that the Board of Trade controls all imports of apples into the United Kingdom from foreign as well as Commonwealth sources, and that this year larger supplies have been brought in than ever before, at a time when our own crops are the biggest in history? Is the hon. Lady aware that

thousands of tons of apples now lie unsold in Britain? Does that not represent a huge wastage of our national resources?

Mrs. Dunwoody: I am sure that the hon. Gentleman will agree with me that British apples are among the best in the world. We must consider the consumer in this matter. My hon. Friend the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has pointed out that the home crop is 18 times greater than the quota we import from other countries. I think British apples are the best.

Mr. William Hamilton: What representations has my hon. Friend had from consumers or consumers' associations for the price of apples to be put up?

Mrs. Dunwoody: Not surprisingly, none. It is a bit wearing when hon. Gentlemen opposite run campaigns which emphasise how difficult the matter is but do not protect the consumers' interests.

Balance of Payments (Import Substitution)

Sir G. Nabarro: asked the President of the Board of Trade what contribution to the balance of payments has been made by import substitution; and whether he will make a statement as to achievements of that policy, duly quantified,ad valorem,

Mrs. Gwyneth Dunwoody: It is not possible to put a figure to the total contribution made by import substitution to the balance of payments.

Sir G. Nabarro: Why is it that the Board of Trade Ministers keep on boasting about all the wonderful results of their import substitution policies if they cannot bring to the House a modicum of evidence that those policies are succeeding in the matter of either apples or horticultural products of any kind, or in any raw material?

Mrs. Dunwoody: I am sure that the hon. Gentleman will be delighted with the rapid exploitation of North Sea gas, which is likely to save about £25 million worth of imports this year and £50 million worth next year, to mention just one item.

Sir G. Nabarro: In view of the highly unsatisfactory nature of that reply, I beg to give notice once again that I will raise these matters on the Adjournment.

Goods at Sea (Limitation of Liability)

Mr. Fletcher-Cooke: asked the President of the Board of Trade when he proposes to introduce legislation to amend the rules governing limitation of liability for goods at sea.

The Minister of State, Board of Trade (Mr. Goronwy Roberts): Legislation will be introduced as soon as possible.

Mr. Fletcher-Cooke: Is it not nearly two years since we took the lead at the Brussels Conference in obtaining that important agreement, and is it not two years too long for the ratification so earnestly looked for?

Mr. Roberts: I agree that ratification is desirable as soon as possible, especially in view of the lead we took at the discussions. However, it has been necessary to consult a great many interests, and this has taken some time.

Hallmarking

Mr. Blaker: asked the President of the Board of Trade what proposals he has for altering the law relating to the hallmarking of gold and silver wares; what representations he has received for and against abandoning the system of compulsory hallmarking; and if he will make a statement.

Mr. Dudley Smith: asked the President of the Board of Trade when his inquiry into hallmarking will be completed; and what representations he has received that it should be abandoned.

Mr. Wiggin: asked the President of the Board of Trade (1) if he has considered the recommendations of the Consumer Council on the hallmarking of gold and silver; and what conclusion he has reached;
(2) what plans he has for bringing up to date the assay and hallmarking laws.

Mrs. Gwyneth Dunwoody: Consultations about the basis on which reform of the hallmarking law should proceed are still in progress. Pending their completion— hope within next few weeks

—I cannot reach conclusions, but the views so far expressed are unanimously in favour of a compulsory hallmarking system.

Mr. Blaker: Can the hon. Lady give an assurance that the compulsory hallmarking system will be retained?

Mrs. Dunwoody: I ask the hon. Gentleman to await the results of the discussions. It would be wrong to commit oneself to a conclusion now. The Stone Committee reported 10 years ago. We have been looking at the need to update this law before we reach any definite conclusions.

Mr. Dudley Smith: Has this inquiry come about through pressure from other E.F.T.A. members? If we do try to achieve some harmonisation with these countries, it will lead to an inevitable deterioration in the hallmarking standards which are so good in the United Kingdom.

Mrs. Dunwoody: Any reform of a law we have had since mediaeval times seems hardly a rapid change. All we are doing is to recognise that hallmarking has a part to play in our exports, and we want to see whether it needs modernising in any way.

Mr. Wiggin: Is the hon. Lady aware that there is a good deal of feeling, both in the Consumer Council and in the Assay Office, that not only should the law be kept as it is but that it should be consolidated and modernised? Will she bear this in mind?

Mrs. Dunwoody: It is because we feel that the law may need modernising in some ways that we have started these talks. A certain amount of unnatural heat has been generated by what have been careful exploratory talks.

Mr. Ridley: Is the hon. Lady aware that the unique advantage of hallmarking is that it protects the consumer not only on the first sale but on subsequent changes of hands in the future? In view of what has been said, will she drop this inquiry and leave the system as it is?

Mrs. Dunwoody: We have had a system of hallmarking for many hundreds of years and perhaps now it is time that some of the laws were tightened up. We


are looking at the subject again following the Stone Committee's Report suggesting that possibly it is time that there were certain minor modifications. But these can only come after discussion with the people concerned.

Mr. Julius Silverman: Will my hon. Friend assure us that if minor modifications are made in the law to bring it up to date, it will still contain a compulsory element in hallmarking?

Mrs. Dunwoody: That is one of the points we are examining. I would not like to commit myself, although I think that that may well be so.

East Germany (Trade)

Mrs. Renée Short: asked the President of the Board of Trade what proposals he has to increase British-German Democratic Republic trade from 1970.

Mr. Mason: The Confederation of British Industry and the East German Chamber of Foreign Trade are at present discussing trade arrangements to cover a period of three years. I am hopeful that the discussions will be successful.

Mrs. Short: I thank my right hon. Friend for that gleam of light. Will he assure us that the talks now proceeding about a long-term agreement will not fall down over the nonsense about nomenclature of the other contracting party? Will he consider opening a British office either in East Berlin or in Leipzig, where increasing numbers of British businessmen go twice a year to exhibit at the Leipzig Fair?

Mr. Mason: I hope that nomenclature will not hinder the negotiations. I do not know whether it would be helpful to have an office in East Germany. This year should be a record year for exports to East Germany, topping the previous record, made in 1966, of £15·9 million.

Mr. Lubbock: Is the right hon. Gentleman aware that the German Democratic Republic has decided as a matter of policy not to create a domestic computer industry, so that the prospects for selling British data processing apparatus there are very bright? Will he draw the attention of the industries concerned to this and accept the hon. Lady's suggestion so that we could have

an office in East Germany where these matters could be pursued in greater detail?

Mr. Mason: No doubt data processing and computer equipment will be one of the items discussed between the C.B.I. and the East Germans this week. I hope that we shall get a favourable report by Friday.

Mrs. Renée Short: asked the President of the Board of Trade why he did not meet the State Secretary for External Economic Affairs of the German Democratic Republic during his recent visit to London.

Mr. Mason: In view of the policy of the United Kingdom and other N.A.T.O. countries on recognition of East Germany, a meeting would not have been appropriate.

Mrs. Short: I am not sure what my right hon. Friend means by this being inappropriate. Is he aware that, because of the strictures of the Foreign Office on the trade connections we have with the German Democratic Republic, we are cutting off our trade noses to spite our faces? Last year our exports to East Germany were only £13 million whereas the exports to East Germany of the Federal German Republic were £160 million? Is it not high time we normalised our trade relations with the German Democratic Republic, as many of our N.A.T.O. and Western European partners have already done?

Mr. Mason: My hon. Friend obviously did not hear the statistics I gave in my previous reply. This year looks like being a record year for our exports to East Germany.

Mr. Bruce-Gardyne: Should not the right hon. Gentleman point out to the hon. Lady that it is the policy of the Government to cut off their trade noses to spite their faces in all sorts of directions?

Mr. Mason: In spite of the high principles we have on this side of the House, as distinct from hon. Members opposite, particularly the hon. Member for South Angus (Mr. Bruce-Gardyne), our export trade is not doing badly.

Mr. George Brown: Is my right hon. Friend aware that, while there is not


much that my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short) and I agree upon in terms of foreign politics, on this issue the Government are missing the point? When Herr Brandt has decided upon an Ostpolitik, why should we hold behind? Is it not now time for us to open up trade avenues, which means having an office in East Germany? Otherwise other people will pick it all up long before we get there?

Mr. Mason: Our trade with East Germany is increasing, and this week there is the possibility that we shall be able to establish a three-year trade agreement with East Germany as distinct from the annual reviews we have had in the past.

Mrs. Short: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

Civil Aviation (Fares)

Dr. Gray: asked the President of the Board of Trade what his present policy is regarding International Air Transport Association fare restrictions.

Mr. Goronwy Roberts: The Government's policy is outlined in paragraphs 60 to 62 of the White Paper on Civil Aviation Policy.

Dr. Gray: Is my right hon. Friend aware that package tours on reputable air carriers are sold in Western Germany at prices considerably less than the normal tourist fares? Will he consider the implications for British tourist agents if the £50 allowance is abolished and these can be purchased freely from this country?

Mr. Roberts: Part of my hon. Friend's supplementary question ranges beyond the responsibilities of my Department, but I take note of what he says about the tourist allowance. If he refers to paragraphs 55 to 59 of the White Paper he will find, with the paragraphs I have referred to, a fairly complete answer to his question.

Mr. Corfield: asked the President of the Board of Trade if, in view of the

cessation of international control over scheduled air fares on the Atlantic, he will remove all remaining controls over the fares charged by operators of either whole aircraft or inclusive tour charter services operating on this route.

Mr. Goronwy Roberts: I hope that scheduled carriers will agree on a realistic tariff. Until then, fares are controlled by the Governments concerned. The Government's policy on inclusive tour prices and affinity group travel is outlined in paragraphs 55–59 of the White Paper on Civil Aviation Policy.

Mr. Corfield: Is it not quite clear from the White Paper and the Edwards Report that the Government's attitude is that the chartered and inclusive tour fares should be controlled only to the extent that it is necessary to protect the scheduled carriers? As the Question indicates that the scheduled airlines have thrown over their protection, why continue the control?

Mr. Roberts: I could not agree that the scheduled airlines have thrown over this protection. I would be very surprised to learn that they did not want a continuation of the appropriate protection so long as it is needed. These paragraphs indicate the basis on which we may consider removing that.

Cotton Textiles (India and Pakistan)

Dr. Gray: asked the President of the Board of Trade if he will make special arrangements to mitigate the damage caused to India and Pakistan by the proposed 15 per cent. tariff against their cotton textile exports to this country.

Mrs. Gwyneth Dunwoody: My right hon. Friend the former President of the Board of Trade said in his statement on 22nd July that he saw no reason to think that, with the possible exception of India, the developing countries of the Commonwealth generally will be able to export less to Britain over the proposed tariff than under a continuation of the present quota system. So far as India is concerned, in determining the level of aid after 1972 we shall be willing to take into account against the background of her general aid requirements at that time any adverse effects on her exports arising from the tariff.

Dr. Gray: In view of the damage done to India, why were there no consultations with the Indian Government before the decision was taken? Why has my hon. Friend decided to strike this blow at the Commonwealth in favour of Portugal, which, as a member of E.F.T.A., will benefit?

Mrs. Dunwoody: The Board of Trade is opening discussions in Delhi this week with the Indian Government. I hope we shall be able to reach an agreement.

Mr. Fletcher-Cooke: Is the hon. Lady aware that when I sought to put a similar Question on this subject to the Board of Trade, I was told that responsibility had been transferred to the Ministry of Technology? Since she has now accepted responsibility in the case of the hon. Member for Yarmouth (Dr. Gray), may I ask whether it is not the fact that South Korea, much more than Portugal, will be a beneficiary of this change? Will not the Textile Council soon be regretting its decision to remove from the British manufacturer the protection of the quota?

Mrs. Dunwoody: It is true that there were some alterations in those countries which supply goods to Great Britain, but we have said that we shall take great care to promote the interests of Commonwealth countries in future talks, and I hope that those countries which are able to be efficient in world markets will be able to maintain more than their share of the British market.

Mr. Blackburn: Will my hon. Friend bear continually in mind the needs of our own domestic textile industry, which has suffered more than any other industry in this country from cheap imports? If India and Pakistan have to be helped, surely the best way in which to help them is by not killing our own industry.

Mrs. Dunwoody: I do not think there is any intention of doing anything which will kill our own industry. I am sure that, under the reorganisation schemes, the cotton industry will be able to compete in world markets.

Toy Manufacturers (Advertising)

Mr. Ashton: asked the President of the Board of Trade whether he will introduce legislation to prevent toy manufac-

turers from advertising toys between now and Christmas Eve.

Mrs. Gwyneth Dunwoody: I am not aware of any justification for such a restriction.

Mr. Ashton: Is my hon. Friend not aware of the extensive advertising on Children's Hour of toys at this time of year and of the embarrassment which it causes to lower-paid workers and widows with families? Does she not think that this form of direct selling to children is unethical?

Mrs. Dunwoody: I accept my hon. Friend's point that selling methods to children can cause difficulty; there is no doubt of that. However, he may be wrong when he says that advertising is the criminal in this instance, because sometimes it helps people with not quite so much money to pick out what is the best value for money.

Sir G. Nabarro: Will not the hon. Lady recognise that this Question invites the soubriquet for the hon. Member of "Scrooge"?

Mrs. Dunwoody: I sometimes think that if hon. Members opposite were as concerned about widows and lower-paid workers as are my hon. Friends, life in this country would be a lot simpler.

Liverpool Airport

Mr. Fortescue: asked the President of the Board of Trade what reply he has sent to the Liverpool City Council to its recent request for financial assistance for Liverpool Airport.

Mr. Goronwy Roberts: I am still considering the request for financial assistance made by the delegation which called on me on 27th October and amplified in a letter received earlier this month.

Mr. Fortescue: Is the Minister aware that the crying need of this airport is for more traffic? Will he undertake to the House that he will put no obstacles in the way of airlines wishing to use this airport? In particular, would he explain to the House why he found himself unable to accept the application of an American airline which wished to fly in and out of Liverpool?

Mr. Roberts: The hon. Member has mentioned some of the considerations


which are present in our minds in considering this application; a few others were added in the letter which we received. I can only assure him that we shall give close attention to all that has been said to us and that we shall send a reply as soon as possible.

Mr. Ronald Atkins: Will not the Minister agree that it is inconsistent for the Government to subsidise this form of rapidly increasing passenger transport when it is their policy not to subsidise other forms of passenger transport which are declining?

Mr. Roberts: I do not think that we can engage in a detailed argument about the propriety of certain policies with regard to various airports and various kinds of service, especially not at Question Time, but I take the point.

Civil Aviation (White Paper)

Mr. Fortescue: asked the President of the Board of Trade when the White Paper on the Report of the Edwards Committee on Civil Aviation will be published.

Mr. Robert Howarth: asked the President of the Board of Trade when he will publish a White Paper on the Edwards Committee Report on civil air transport.

Mr. Lubbock: asked the President of the Board of Trade if he will now make a statement about the Government's proposals for the air transport industry in the light of the Edwards Committee Report.

Mr. Mason: The White Paper was published on 12th November.

Mr. Fortescue: In the Edwards Report it was recommended that the objective of civil aviation in this country should be to provide the best service to the customer consistent with safety. Do the Government accept that recommendation or do they, as it appears in the White Paper, water it down?

Mr. Mason: No, Sir. Safety is always in the forefront of our minds. No doubt the hon. Gentleman is aware that we even had a short debate about air safety on the Adjournment last night.

Mr. Howarth: Can my right hon. Friend say how he hopes to incorporate

the A.R.B. in the proposed civil aviation authority? Will he still be able to make use of the large amounts of voluntary work done on this body by the leaders of industry?

Mr. Mason: Yes, I hope that that will continue. My hon. Friend should be aware that the A.R.B., the A.T.L.B., B.O.A.C. and B.E.A., people whose contracts were running out during the course of next year, will be receiving an extra 12 months' contract so that we can use all the expertise necessary in the formation of the civil aviation authority, but we hope that those who have given us a great deal of experience and advice in voluntary capacities will continue to do so.

Mr. Lubbock: Will the right hon. Gentleman reconsider the answer which he gave me last week when he indicated that the civil aviation authority would be responsible for the restructuring of private industry in accordance with the Government's White Paper? Is not this properly the responsibility of the Industrial Reorganisation Corporation, if its services are required? Will the right hon. Gentleman say whether, if the private sector asks for the services of the I.R.C., those services will be accorded to it?

Mr. Mason: I would have thought that if the civil aviation authority wished to use the services of the I.R.C., it would certainly do so, but at this stage I do not think it is necessary.

Mr. Corfield: My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) asked the right hon. Gentleman whether he would confirm that the objective, subject to safety, would be service to the customer. That was the answer required.

Mr. Mason: It has always been recognised that the national corporations, B.E.A. and B.O.A.C, have always set the highest standards of safety in civil aviation; that will continue.

Mr. George Brown: I am a little mixed up. As I am supposed to be flying out from Liverpool Airport tomorrow night, will my right hon. Friend say whether Liverpool Airport will be there tomorrow night?

Mr. Speaker: Order. That was a supplementary question on the last Question.

Asian Fair, Teheran (Export Orders)

Mr. David Watkins: asked the President of the Board of Trade what estimate he has made of the increase in export orders resulting from British participation in the Asian Fair held in Teheran in October, 196.

Mrs. Gwyneth Dunwoody: I cannot at present estimate what exports may result from British participation in this fair last month. Initial reports by British firms taking part make it clear that the fair provided excellent opportunities for them on a growing market.

Mr. Watkins: Does my hon. Friend subscribe to the view that in practice this turned out to be an Iranian rather than an Asian fair? Is she aware that the British pavilion, which I had the opportunity to visit, was generally rated as the best there?

Mrs. Dunwoody: I am grateful to my hon. Friend for his second remark. He should not underestimate the number of nations taking part. In this instance it was more than 40. I think that the fair provided many opportunities to British businessmen.

Mr. R. C. Mitchell: Will my hon. Friend send the congratulations of the House to all those responsible for organising the British stand at this fair? Without doubt, it was by far the best there and was a first-class effort.

Mrs. Dunwoody: I will gladly do so. The work done by the Fairs Division of the Board of Trade is some of the most efficient of any display services anywhere.

Mr. Costain: Will the hon. Lady arrange for photographs of the British pavilions at these various fairs to be exhibited so that hon. Members may see them?

Mrs. Dunwoody: The pavilion had a special roof and some other architectural features of considerable interest. I will certainly try to obtain photographs for the House.

Invisible Exports

Mr. Hall-Davis: asked the President of the Board of Trade if he will make a statement about his proposals for new ways of encouraging invisible exports.

Mr. Blaker: asked the President of the Board of Trade if he will make a statement about his new proposals for encouraging invisible exports.

Mr. Ridley: asked the President of the Board of Trade what steps he proposes to take to increase the United Kingdom's invisible trade surplus.

Mr. Mason: The Government give assistance in a number of ways. I shall be discussing the situation with the Committee on Invisible Exports next month.

Mr. Hall-Davis: As experience since devaluation has shown that there is a direct relationship between the volume of invisible exports and larger costs to invisible importers overseas, will the right hon. Gentleman discuss in these talks the possibility of reducing invisible export costs by the abolition of S.E.T. paid by those who are invisible exporters?

Mr. Mason: Of course I recognise that invisible exports have done extremely well in recent times. However, I know that I shall have to trawl old ground and that the S.E.T. argument will come to the fore. I cannot promise that I shall relieve them of it.

Mr. Blaker: Whatever may be the result of the right hon. Gentleman's forthcoming consideration of this matter, is he not aware that there is already a report, which is now two years old, which makes recommendations for helping the service industries by way of tax, the Queen's Award for Industry and statistics? Could he not get on with some of those recommendations now?

Mr. Mason: I have already read the report and seen the recommendations. I have no doubt that they will be before us when I meet the Committee on Invisible Exports.

Mr. Ridley: Will the right hon. Gentleman accept the advice of the Committee on Invisible Exports and separate the contribution which the private sector has made to net invisible earnings from the burdens imposed by the Government's invisible earnings and thereby show the extraordinary extent to which the City has saved the Government's economic bacon?

Mr. Mason: I would not agree that it is only the City which has saved the country's economic bacon. The hon. Gentleman should be, and no doubt is, aware that there has been much productive enterprise on the shop floor in order to get the visibles off the ground, too. However, I am aware also that the exporters of invisibles feel that there is much mystique in their operations and that they would like to have their image enhanced, and I will look at that, too.

Mr. Barnett: In view of the rapid growth of invisible earnings since the advent of S.E.T., will not my right hon. Friend study whether it has been positively advantageous in this respect?

Mr. Mason: It may well have acted as a spur.

Mr. Maudling: This is a serious point. Is it being argued by the Minister that the result of doing well with invisible exports is to be welcomed by a tax imposed on those who have achieved those invisible exports? S.E.T. is certainly a handicap to invisible exporters. Will not the right hon. Gentleman do something about it?

Mr. Mason: I cannot promise, but I said that I would have to trawl over old ground and this includes S.E.T. Invisible exporters have done remarkably well in spite of it.

Export Profitability (Study)

Mr. Hall-Davis: asked the President of the Board of Trade if he proposes to publish the Study of Export Profitability which the Economic Research Intelligence Unit of his Department has undertaken; and when this report may be expected.

Mrs. Gwyneth Dunwoody: Yes. Preparation of the study for publication is well advanced and I hope that it will appear as a Board of Trade Economic Paper early in 1970.

Mr. Hall-Davis: While welcoming the Parliamentary Secretary's statement, may I ask her to press on and ensure that there is no delay, because it would be most helpful that these matters should be thoroughly discussed with a view to reaching policy decisions?

Mrs. Dunwoody: I am sure that the study will be of great assistance. The difficulty was that although it was based on a limited study, the information that we have received in answer to many questions needed to be correlated very carefully before it could be produced. We are certainly pressing on with it now.

Import Deposits

Mr. Kenneth Baker: asked the President of the Board of Trade by how much he estimates that imports will increase when the rate of import deposits is reduced from 50 per cent. to 40 percent.

Mrs. Gwyneth Dunwoody: It is not possible to make a reliable estimate.

Mr. Baker: If it is not possible to make a reliable estimate, why choose the figure of 40 per cent.? Why not 30 per cent. or 20 per cent.? Is it not a fact that the Government, by extending the import deposits scheme, are acting in ignorance of the effect of the scheme and fear of what might happen if it comes off? Is the hon. Lady aware that ignorance and fear seem to be the two motives?

Mrs. Dunwoody: Unlike previous Governments this Government never acts from ignorance or fear. The hon. Gentleman who waxes, so eloquent, might like to know that between 1964 and 1968 imports rose on average 13 per cent. whereas in the first three quarters of last year they were only 5½ per cent. higher.

Mr. Higgins: Have the Government even attempted to make such an estimate?

Mrs. Dunwoody: What we need is accurate information, and it seems to us to be better to use the indicators I have already given than simply say at the present moment that this is the effect of the import deposits scheme.

National Exhibition Centre

Mr. Kenneth Baker: asked the President of the Board of Trade when he expects to reach a conclusion regarding the national exhibition centre.

Mr. Milne: asked the President of the Board of Trade what progress has


been made by the committee set up by his Department to examine the possibilities of establishing a national exhibition centre in this country; and if he will make a statement.

Mr. Speed: asked the President of the Board of Trade when his Department will make a final decision on the proposals for a national exhibition centre now under consideration.

Mr. Mason: I am aware of the urgency of this problem and I will announce my decision at the earliest possible moment. To this end the Steering Committee set up under my noble Friend the Minister of State to consider the national exhibition centre met last week at my request to review urgently the latest proposals.

Mr. Baker: As this has been going on for ten years, might I press the President of the Board of Trade to reach a rapid decision? In the building of the exhibition centre could we have proper international conference facilities? While this is being considered, could I press upon the right hon. Gentleman the advantages of having the centre at Northolt, which is not only close to my constituency but is on the edge of the greatest airport of the greatest city in Western Europe?

Mr. Mason: I think it is an urgent matter. It has been hanging fire since 1958, and I intend to deal with it urgently.

Mr. Milne: Is my right hon. Friend aware that a quick decision on this will benefit not only the South but the North-East and the other development districts? Is he aware that in reply to an Adjournment debate on 12th February his hon. Friend told me that this matter would not just be noted but would be actively considered, and that those concerned would get on with the job?

Mr. Mason: Yes, Sir.

Mr. Speed: Is the right hon. Gentleman aware that there are powerful and compelling arguments for siting the centre in the Midlands, subject to certain safeguards? Would he not agree that it is much healthier that we should have a full and factual statement as soon as possible rather than constant leaks in the Press?

Mr. Mason: Yes. I have one proposal before me, and only one, which is receiv-

ing my urgent consideration. The hon. Gentleman is aware of it. I have no equivalent proposal before me to compare with it. This is the proposal for a possible site in Birmingham, and it is the one to which I am now applying my mind.

Mr. Geoffrey Lloyd: In reaching his decision, will the right hon. Gentleman bear in mind the great and increasing congestion in the London area, and the availability in the Midlands of a site at the heart of a national communications system by road, rail and air?

Mr. Mason: Yes. The right hon. Gentleman is making a good case for the Birmingham Chamber of Commerce and Birmingham City Council.

Mr. Julius Silverman: May I press the case of the Birmingham lobby on this? Might I ask the Minister, before he finally comes to a decision, to bear in mind the peculiar and particular advantages of the site already suggested, which has very good rail and air links and is already in the centre of the industrial Midlands?

Mr. Mason: Communications will be particularly important, and I am certainly taking note of what my hon. Friend has said.

Sir K. Joseph: Since the right hon. Gentleman has been asked so strongly to consider Birmingham, will he bear in mind the importance of carrying with him in his decision the majority of the national exhibitors, and industry as a whole? Would he also bear in mind the importance of securing proper hotel arrangements for visitors?

Mr. Mason: The Birmingham proposal, of course, includes the building of a new hotel. As for exhibitors, if this did go to the Midlands it would be likely that their rates would be cheaper because the acquisition of land would be cheaper. The building would consequently go up much quicker than down here. As a result I would have thought that exhibitors would quickly accept that it is a good area in which to exhibit.

Companies (Rhodesian Interests)

Mr. Ellis: asked the President of the Board of Trade what is his policy with regard to transfer of companies registered


in this country to other countries where that company has interests in Rhodesia; and if he will make a statement.

Mrs. Gwyneth Dunwoody: This is not a matter in which the Board of Trade has any powers under the Companies Acts.

Mr. Ellis: If my hon. Friend accepts that it is a question of someone seeking to have something done legally so that he could trade with Rhodesia, and thus get round the Act, why does she say that her Department is not responsible? Surely someone must be responsible?

Mrs. Dunwoody: We have found no evidence showing that there has been a breach of the sanctions legislation. We should, of course, take action if any was discovered.

Turnhouse Airport, Edinburgh

Mr. Dalyell: asked the President of the Board of Trade what progress is being made in the modernisation of Turnhouse Airport, Edinburgh.

Mr. Adam Hunter: asked the President of the Board of Trade what representations he has had on the need for a new runway and other facilities at Turn-house Airport; and if he will make a statement.

Mr. William Hamilton: asked the President of the Board of Trade how many representations he has had in the last month concerning the need to extend and improve the facilities at Turnhouse Airport, Edinburgh; and view the need to foster industrial development in the east of Scotland, if he will now treat this matter as one of urgency.

Mr. Goronwy Roberts: Representations have been received from a variety of sources, including four since mid-October, pressing for major improvements to be made at Turnhouse. I am aware of the importance and increasing urgency of this issue to Edinburgh and to Scotland, and I am sorry that I am not yet in a position to make a statement.

Mr. Dalyell: Following the recent near miss between a Vanguard and a Hunter, has any directive been given to the military in Scotland not to divert military aircraft to Turnhouse until such time as ground radar has been installed?

Mr. Roberts: That is another question. I have drafted a letter in reply to my hon. Friend's letter on this point.

Mr. Hunter: May I press on my right hon. Friend that to extend the existing runway would not solve all the problems at Turnhouse Airport? Will he impress on Edinburgh Corporation and the airlines using the airport that terminal facilities in the city are required for passengers leaving from the city and those coming into the city?

Mr. Roberts: I am well aware of the concern about facilities. There is another Question on that point which I hope to answer. We welcome the participation of local authorities and I should welcome anything that my hon. Friend and others can do to induce Edinburgh Corporation to review its position.

Mr. William Hamilton: Does my right hon. Friend recognise that the entire economic development of Eastern Scotland probably depends more on the provision of another runway at Turnhouse than on almost any other single factor? Does he not realise that the air facilities at Turnhouse are probably worse than those in any other comparable city in the British Isles?

Mr. Roberts: I agree that the aerodrome is of great importance to the economy of East Scotland. Whether this can best be aided by a new runway or by extending the existing runway is a matter of judgment. I assure my hon. Friend that I will bear very much in mind the second point that he made.

British European Airways (Spare Parts)

Mr. Dalyell: asked the President of the Board of Trade whether he will give a general direction to British European Airways to ensure that spare parts are available at all airports.

Mr. Goronwy Roberts: No, Sir. This is a matter for B.E.A.

Mr. Dalyell: Does not my right hon. Friend think that the long-suffering passengers and, indeed, pilots using Edinburgh Airport have enough to contend with, without waiting for spare parts to be brought over from Glasgow? Will he look into the matter?

Mr. Roberts: Punctuality depends on a number of factors. The number of delays at this airport due to the lack of spare parts was as low as 0·1 per cent. There are thousands of spare parts, B.E.A. tries to provide a good library in each place, but it cannot hope to have every spare part at every place where there is a difficulty.

Mr. Corfield: Is it not clear from the answer which the Minister gave to another Question that the regularity maintained by the independent airlines has, on the whole, been very superior to that of B.E.A.?

Mr. Roberts: No. I could not agree with the hon. Gentleman. That is not so.

European Economic Community (Trade Talks Procedure)

Mr. Marten: asked the President of the Board of Trade if Her Majesty's Government accept Article 113 of the Rome Treaty under which the European Economic Community Commission conducts all trade talks with non-member countries.

Mr. Mason: As members of the European Economic Community we should be bound by Article 113 of the Treaty of Rome in the same way as other members. The Commission's rôle in trade negotiations is, however, subject to the authority of the Council of Ministers.

Mr. Marten: Do the Minister and the Government like the effect of this article on our independent action in economic affairs? Do they wholeheartedly agree with it?

Mr. Mason: After the transitional period the Commission is empowered to negotiate on behalf of the Community, but it would be within the framework of the directive given by the Council of Ministers. Secondly, there are exceptions. During the course of the last year—indeed, recently—the Community approved procedure by which in certain circumstances member States will still be able to negotiate bilateral agreements with non-European Economic Community countries after 1st January, 1970.

Aircraft Noise (Heathrow Airport)

Mr. Hugh Jenkins: asked the President of the Board of Trade why he has not taken action to stop continual viola-

tions of the minimum noise routeings laid down in the United Kingdom in the Putney-Roehampton area; why his Department take a long period to deal with admitted violations which are drawn to their attention; and what sanctions he now proposes to prevent further violations.

Mr. Goronwy Roberts: I am not aware of such violations. It is not always possible for air traffic control to direct aircraft along these minimum noise routeings, but deviations are kept to the minimum.

Mr. Jenkins: Is my right hon. Friend aware that a year ago his hon. Friend who was then in charge of this matter gave me an undertaking concerning the avoidance of the Putney-Roehampton area and that the Board of Trade since then has persistently routed aircraft over this area instead of over the minimum noise routeing area? Will he look into that?

Mr. Roberts: I will certain look further into the matter. I have already looked into it. I do not know that my information accords quite with what my hon. Friend said. I understand the concern felt in the area about noise and I will certainly look into the matter again.

Mr. Bessell: Does the right hon. Member agree that while it is vital to keep noise levels to the minimum, at the same time that should not be at the possible expense of safety?

Mr. Roberts: Yes. That is the dilemma, and the hon. Member has put it very fairly.

Mr. Hugh Jenkins: asked the President of the Board of Trade if he is aware that most aircraft landing at London Airport, Heathrow, carry about 100 passengers and that as much of the glide path area has a high population density some 18,000 people are subjected to nuisance per lienear mile of overflight; and if he will take appropriate action to prevent this nuisance.

Mr. Goronwy Roberts: About six to seven million passengers a year land at Heathrow and unfortunately some disturbance to people in the glide path area is inevitable. The existing procedures on approaching to land, and noise insulation grants in the most exposed places, help


keep this disturbance to a minimum. Aircraft noise certification will eventually do much to reduce the nuisance.

Mr. Jenkins: As Heathrow has the only glide path of any major airport in the world which involves flying over heavily populated residential areas, does not my right hon. Friend agree that this affords a reason for pressing on as quickly as possible with the development of the third London Airport, preferably at Foulness?

Mr. Roberts: As my hon. Friend knows, that is being done. I should like to stress the importance of achieving international agreement on aircraft noise certification. That will certainly help.

Mr. Russell Kerr: Is my right hon. Friend aware that his view that the noise scourge is being kept to a minimum is not widely held in the Cranford, Heston and Hounslow area, which has been suffering from this affliction and in which the affliction is getting worse every day?

Mr. Roberts: I take full note of what my hon. Friend says.

Mr. Fletcher-Cooke: Has the right hon. Member any comment to make on the allegation that the noise recording machinery at Heathrow is deliberately falsified?

Mr. Roberts: No, except to say that that statement is false.

Mr. Worsley: asked the President of the Board of Trade whether he will issue instructions to ensure that all aircraft join the glide path at or above 3,000 feet.

Mr. Goronwy Roberts: No, Sir. To do so would have a number of serious consequences which are unacceptable. Not least, all aircraft approaching Heathrow to land to the West would have to fly over central London, thus substantially widening the area likely to be affected by noise.

Mr. Worsley: Does the hon. Member agree that one of the consequences of doing this would be to reduce the noise, as high aircraft would make less noise near the ground over central London than low aircraft?

Mr. Roberts: I am advised that the net result would be to intesify noise at

the closest point to the airport and to increase the amount of noise.

Mr. Lipton: is the Minister aware that some aircraft fly over central London at below 3,000 feet? Will he do something to stop that?

Mr. Roberts: I shall need to look closely at what my hon. Friend said.

Mr. Worsley: asked the President of the Board of Trade whether he will give an assurance that when jumbo-jets are introduced next summer they will use the existing three-degree glide path.

Mr. Goronwy Roberts: The Boeing 747 will follow normal procedures including the use of the three-degree glide path just as any other airliner.

Mr. Worsley: Is the hon. Member aware that that assurance will be welcomed by those under the glide path? Will he go a little further and give an assurance that these new aircraft will not be noisier than existing types?

Mr. Roberts: I should not care to add to my original answer. If the hon. Member puts his point a little more specifically in another Question, I will see what I can do.

Mr. Hugh Jenkins: As these aircraft will be larger than previous aircraft and will, therefore, carry more passengers per aircraft, is there any possibility that when they come into general use the number of flights will be reduced?

Mr. Roberts: I suppose that is possible. I could not say.

Weights and Measures Act (Beer)

Mr. Roebuck: asked the President of the Board of Trade how many prosecutions there have been for serving beer in short measures under the Weights and Measures Act, 1963.

Mrs. Gwyneth Dunwoody: Prosecutions are the responsibility of local weights and measures authorities. Their reports for the year 1967–68—the last for which complete information is available—show that there was one prosecution for serving beer in short measure during the year. It was successful.

Mr. Roebuck: Does not that Answer show that the law is not being adequately enforced? Is my hon. Friend aware


that when beer is in good condition it is almost impossible to get a pint into an ordinary pint pot? Is he further aware that a collar of a quarter of an inch represents an extra 2 per cent. on the brewers' profits and that it is out of that 2 per cent. that the brewers are subsidising the Conservative Party? Will she stop this abuse?

Mrs. Dunwoody: If the brewers are subsidising the Conservative Party they are not getting much for their money. If my hon. Friend is worried about this matter he might like to use his hon. Friends as inspectors to carry out a series of controlled tests.

Sir A. V. Harvey: Would it not be more appropriate if the hon. Lady applied herself to the fact that as a result of inflation under this Government beer is shortly to go up in price by 2d. a pint?

Mrs. Dunwoody: I do not have the strong emotional involvement in beer which some hon. Members appear to have. It seems to me that this legislation is doing a very good job for the consumer in general.

QUESTIONS TO MINISTERS

Mr. Lubbock: On a point of order. 1 notice, Mr. Speaker, that Questions Nos. 60, 61 and 65 today have been taken with earlier Questions on the Order Paper. I seem to recall that at one time you stated it as your policy that Questions put down late and, therefore, appearing as high numbers should not be taken with Questions appearing earlier on the Order Paper, so as not to pre-empt hon. Members' Questions when they happen to have put down, say, Questions Nos. 40 and 41.
It seems to me that the rule has been modified by the Board of Trade. I do not know whether it has been modified by any other Departments. I wonder, Mr. Speaker, although I have no personal interest in the matter this afternoon, whether you could renew the advice you gave earlier to Ministers not to take Questions which appear towards the end of the list with earlier Questions.

Mr. Speaker: The hon. Member has raised an interesting point. He can be sure that the Chair is aware of the

factor, which he has mentioned several times in the House, that to take late-numbered Questions might pre-empt somebody who has taken the trouble to put down a Question early and prevent him from having the opportunity to ask a supplementary question.
I watch all that. I have to decide whether, say, Question No. 60 happens to be really late. There are occasions when for any Minister more than 60 Questions are put down at the very first opportunity. I am, however, aware of the problem and I watch it all the time. It does not automatically follow that if a Minister ties up Question No. 30 with, say, Question No. 90, I shall invite a supplementary question on the latter.

EXCISE BETTING DUTY (PAYMENT)

Mr. Iain Macleod: Mr. Iain Macleod (by Private Notice) asked the Chancellor of the Exchequer whether he will make a statement on the payment of excise betting duties under the Finance Act, 1969, in view of the observations of the Lord Chief Justice.

The Chancellor of the Exchequer (Mr. Roy Jenkins): The Divisional Court yesterday refused an application by two bookmakers for an Order of Mandamus in this matter. In September, following a meeting of the bookmaking and other racing interests with my right hon. Friend the then Financial Secretary, I decided to make a concession allowing the licence duty to be paid in monthly instalments. This was accepted at the meeting as a helpful alleviation.
In view of the remarks of the Lord Chief Justice, I will now consider whether the concession can be maintained, although I must tell the House that there would be considerable administrative difficulty, as well as inconvenience, to say the least, to the great majority of bookmakers, in rescinding it.
I apologise to the House for being in the position, perhaps unusual for a Chancellor, of straining the law in favour of the taxpayer. No one has suffered by reason of what has occurred except to a small extent the Revenue.

Mr. Macleod: Does not the Chancellor agree that the story is a little more complicated than that? The right hon.


Gentleman has started it as from September. Is he aware that in Committee on the Finance Bill on 11th June, 1969, with support from both sides, I moved an Amendment concerning the precise point of monthly payments and on 16th July, on Report, the then Financial Secretary to the Treasury, rejecting an Amendment by my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies), said that for technical and administrative reasons it simply could not be done?
My first Question, therefore, is to ask the Chancellor to explain to the House why something which, in the House of Commons in June and July, was said to be technically and administratively impossible becomes feasible after a meeting with the noble Lord, Lord Wigg, and the Horserace Betting Levy Board in September.
Secondly, does not the Chancellor realise that it is a most serious matter when, even with excellent intentions, which in this case I do not in the least dispute. a Minister tries by his own Ministerial edict to overrule both the law and Parliament? Does not the Chancellor realise that in those circumstances it is an error so to do?

Mr. Jenkins: In reply to the first point, we try to do better as time goes on. I must point out to the right hon. Gentleman that although he very reasonably led his right hon. and hon. Friends in voting against us many times in Committee and on Report, they did not do so on this issue.
In reply to the second point, I accept what the right hon. Gentleman has said, and what has been said, and that I must curb my good intentions in future. Generosity can be dangerous.

Mr. Macleod: May I press the right hon. Gentleman on one matter which he has not answered? We did not vote on this matter because of the assurance given by the then Financial Secretary to the Treasury that the proposal was technically and administratively impossible. That was what Parliament was told, and on that basis Parliament made up its collective mind. The point which has now arisen is that the Chancellor, by his own edict, is attempting to get round the law.

Mr. Jenkins: I was only attempting, as the right hon. Gentleman will be aware

and, indeed, recognises, "to get round the law" to alleviate genuine difficulty.

Mr. Cant: Without holding any brief for bookmakers, may I ask my right hon. Friend to do everything possible to meet the bookmakers in this matter if there are not insuperable legal obstacles? [HON. MEMBERS: "Why?"] This is an unfair tax. Not only that, but it will lead to a loss of revenue in the long run for local authorities.

Mr. Jenkins: That is a much wider issue. Although I normally agree with my hon. Friend, I do not agree with him on that. Without question, what was done—whether it was wise or not—was to attempt to meet a bookmaker's difficulty. Certainly, the lesson I draw is that it is perhaps dangerous to be too generous to bookmakers.

Mr. Boyd-Carpenter: Is the Chancellor aware that in its recent report, the Public Accounts Committee criticised both the Revenue and the Customs for granting tax concessions which, however benevolent in intention, were made without statutory authority? As the observations of the Lord Chief Justice, to which my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) has referred, are of a general character, will the Chancellor now proceed to put these concessions on a proper statutory basis and subject ot the consent of Parliament?

Mr. Jenkins: I will certainly take that into account, although the history of extra-statutory concessions of the sort to which the right hon. Gentleman refers is a long one going back under many Chancellorships and several Administrations. The right hon. Gentleman has to some extent put the matter into perspective by referring to the wide range of extra-statutory concessions which already exist.

Mr. Sheldon: Surely my right hon. Friend is only following a long and honourable tradition of allowing time for payment as and when the Department can so organise it.

Mr. Jenkins: Certainly, the desire is to allow time for payment, although the question is how this stands exactly technically in relation to the Statute.

Dame Irene Ward: As the Chancellor has not answered my right hon. Friend's


specific question, would he kindly inform the House whether it is usual for the Treasury to make a habit of giving the answer that things are technically and administratively possible when it either does not want to deal with the matter or thinks that that is a more sympathetic answer which will soothe the House into acceptance of the point of view expressed?

Mr. Jenkins: No, not at all. Some things are technically and administratively impracticable. Indeed, I notice that there is a report to the House, published today, on this very matter.

Mr. Barnett: May I ask my right hon. Friend not to allow the Scrooge-like attitude of the right hon. Member for Enfield, West (Mr. Iain Macleod) to prevent him continuing what has been going on for a long time, whereby tax collectors on occasion adopt a somewhat flexible and understandable approach? Will my right hon. Friend confirm that in questions of income tax and corporation tax, for example, particularly in present liquidity shortages, he will not stop tax collectors giving the concessions which they have been giving for a long time?

Mr. Jenkins: I do not think that that arises absolutely directly on the question which has been asked. I would certainly have no immediate intention of proceeding in the direction which my hon. Friend has mentioned and which would, I am sure, be unwelcome to right hon. Gentlemen and hon. Members opposite.

Sir Harmar Nicholls: Is the Chancellor aware that, quite apart from the technical and legal points made by my right hon. Friend, many of us object to the language which the right hon. Gentleman used in his original reply? To call this a "concession" when it is merely extending the payment of a tax which is unfair and extortionate really is straining the English language.

Mr. Jenkins: No, Sir. If the hon. Gentleman thought that the tax was unfair and unreasonable he should have voted against it.

Mr. Dalyell: Has my right hon. Friend any notion of the administrative cost involved? And will not some of the

remarks from the other side of the House come rather strangely from a party which is always lecturing us on cutting the Civil Service?

Mr. Jenkins: I cannot give an estimate to my hon. Friend in reply to his first question, but I take note of the point in his second.

Mr. Lubbock: Did the Chancellor know that it was the officially declared policy of the Tory Party to mitigate the harmful effects of taxation? In view of that, is it not rather surprising that so many criticisms are directed from this side of the House to the concession?

Mr. Jenkins: I have long since given up attempting to find consistency in the policies of the Tory Party.

Sir H. Legge-Bourke: Will the Chancellor bear in mind that this is another example of the tendency, which is on the increase, of the Treasury to disregard this House? Would he, particularly in this context, reconsider the evidence given to the Select Committee on Science and Technology by the Clerk of the House on this subject?

Mr. Jenkins: I have no desire at all to disregard this House. Indeed, in what I am doing here I am following a suggestion which the right hon. Gentleman said was made by him.
On the specific point of the evidence to the Select Committee on Science and Technology, although I am sure it is of importance I do not believe that it arises specifically on this Private Notice Question.

BILLS PRESENTED

PORTS BILL

Mr. Frederick Mulley, supported by Mrs. Secretary Castle, Mr. Secretary Ross, Mr. Secretary Thomas, Mr. Roy Mason, Mr. John Diamond, and Mr. Albert Murray, presented a Bill to make, for Great Britain, further provision with respect to the improvement, maintenance and management of harbours and the carrying on of harbour operations (including provision for the transfer of certain harbours and harbour businesses to a National Ports Authority), and with respect to employment at or in connection with harbours, and with respect to incidental or consequential matters; and


for other purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 48].

CHRONICALLY SICK AND DISABLED PERSONS BILL

Mr. Alfred Morris, supported by Mr. Jack Ashley, Dr. Shirley Summerskill, Mr. Neil Marten, Dr. Winstanley, Mr. Will Griffiths, Mr. John Astor, Mrs. Lena Jeger, Mr. George Darling, Mr. Lewis Carter-Jones, Sir Clive Bossom, and Mr. Laurence Pavitt, presented a Bill to make further provision with respect to the welfare of chronically sick and disabled persons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 5th December and to be printed. [Bill 21].

PLANNING BLIGHT AND WORSENMENT BILL

Mr. Walter Clegg, supported by Mr. Hugh Rossi, Mr. Anthony Grant, Mr. Timothy Kitson, Mr. Edwin Brooks, Mr. James Allason, and Mr. Tom Boardman, presented a Bill to amend the law relating to town and country planning, compulsory purchase, compensation for compulsory purchase, betterment, injurious affection, severance and planning blight; to make further provision in connection with planning blight; to provide compensation for persons whose land is adversely affected by the actions of local or public authorities or government departments; to make provision for worsenment; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday, 27th February and to be printed. [Bill 22].

CONSERVATION OF SEALS BILL

Mr. John M. Temple, supported by Mr. Burden, Mr. Deedes, Sir Hugh Munro-Lucas-Tooth, Mr. John Page, Sir George Sinclair, Mr. Archie Manuel, Mr. Arnold Shaw, Mr. Alfred Morris, and Mr. Patrick Wall, presented a Bill to provide for the protection and conservation of seals in England and Wales and Scotland and in the adjacent territorial waters: And the same was read the First time; and ordered to be read a Second time upon Friday, 12th December and to be printed. [Bill 23].

RACE RELATIONS (AMENDMENT) BILL

Mr. David Steel, on behalf of Mr. Jo Grimond, supported by Dr. Winstanley, Mr. Russell Johnston, Mrs. Winifred Ewing, Sir George Sinclair, Mr. John P. Mackintosh, Mr. Brian Walden, and Mr. Esmond Wright, presented a Bill to amend the Race Relations Act 1968 in respect of advertisements and notices and the investigation of complaints arising therefrom: And the same was read the First time; and ordered to be read a Second time upon Friday, 6th February and to be printed. [Bill 24].

RIGHT OF PRIVACY BILL

Mr. Brian Walden, supported by Mr. Douglas Houghton, Sir Edward Boyle, Mr. Eric Lubbock, Mr. Alexander Lyon, Mr. Gilbert Longden, Mr. S. C. Silkin, Mr. Kenneth Baker, Mr. Stanley Orme, Mr. Emlyn Hooson, Mr. John Biffen, and Mr. William Wilson, presented a Bill to establish a right of privacy, to make consequential amendments to the law of evidence, and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday, 23rd January, and to be printed. [Bill 25].

INERTIA SELLING BILL

Mr. Arthur Davidson, supported by Mr. Tony Gardner, Mr. Tom Bradley, Dame Joan Vickers, Mr. James Wellbeloved, Mr. Montgomery, Dr. Winstanley, Mr. W. T. Williams, Mr. William Hamilton, Mr. Lewis Carter-Jones, Mr. Philip Goodhart, and Mr. Richard Marsh, presented a Bill to make provision for the greater protection of persons buying or receiving goods or services at home or at a private place of residence or place of work; to regulate the conduct and consequences of inertia selling; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 30th January, and to be printed. [Bill 26].

LICENSING OF MARRIAGES ON UNLICENSED PREMISES BILL

Mr. Victor Goodhew, supported by Mr. Michael Alison, Mr. John Biggs-Davison, Sir Cyril Black, Sir Eric Bullus,


Mr. James A. Dunn, Sir Robert Grant-Ferris, Mr. Norman St. John-Stevas, Mr. Brian Walden, Mr. Donald Coleman, Mr. Raymond Gower, and Mr. Arthur Davidson, presented a Bill to permit marriages on unlicensed premises; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 13th February, and to be printed. [Bill 27].

PROTECTION OF PENSION RIGHTS BILL

Miss Quennell, supported by Sir Brandon Rhys Williams, Miss Mervyn Pike, Mr. John Pardoe, Mr. Simon Wingfield Digby, Mr. Charles Fletcher-Cooke, Mr. Tim Fortescue, and Mr. Edward du Cann, presented a Bill to amend the law relating to schemes providing pensions, annuities, retirement and other benefits: And the same was read the First time; and ordered to be read a Second time upon Friday, 20th February, and to be printed. [Bill 28].

ABORTION LAW (REFORM) BILL

Mr. Bryant Godman Irvine, presented a Bill to amend the Abortion Act 1967: And the same was read the First time; and ordered to be read a Second time upon Friday, 13th February, and to be printed. [Bill 29].

DEER HUNTING AND HARE COURSING ABOLITION BILL

Mr. Arnold Shaw, supported by Mr. John Ellis, Mr. Kevin McNamara, Mr. Eric S. Heffer, Mr. James Wellbeloved, Mr. Laurence Pavitt, Mr. Edwin Brooks, Mr. Denis Coe, Mr. Robert Sheldon, Mr. Richard Mitchell, Mr. Kenneth Marks, and Mr. Marcus Lipton, presented a Bill to abolish the hunting of deer and coursing of hares: And the same was read the First time; and ordered to be read a Second time upon Friday, 12th December, and to be printed. [Bill 30]

NATIONAL INSURANCE (FURTHER PROVISIONS) BILL

Mr. Nicholas Scott, supported by Mr. Airey Neave, Mr. Turton, Dame Irene Ward, Dame Joan Vickers, Mr. Peter Emery, Colonel Sir Tufton Beamish, Mr. Terence L. Higgins, Mr. Richard Hornby, Mr. Tom Fortescue, and Mr. John Boyd-Carpenter, presented a Bill to make provision for the payment of pensions out

of the National Insurance Fund for certain classes of person not eligible for pensions under the National Insurance Act, 1946: And the same was read the First time; and ordered to be read a Second time upon Friday, 30th January, and to be printed. [Bill 31].

STAMP BILL

Sir Neill Cooper-Key, supported by Mr. Bryant Godman Irvine, presented a Bill to abolish stamp duty on receipts: And the same was read the First time; and ordered to be read a Second time upon Friday, 20th February and to be printed. [Bill 32].

COPYRIGHT BILL

Mr. Raymond Gower, supported by Mr. Hugh Jenkins, Sir Stephen McAdden, Mrs. Jill Knight, Mr. William Wells, Sir John Langford-Holt, Mr. George Darling, Mr. Eric Lubbock, Mr. David Crouch, Mr. Iremonger, Dr. Hugh Gray, and Mr. Norman St. John-Stevas, presented a Bill to amend the Copyright Act, 1956, so as to make provision for the subsequent variation by the Performing Rights Tribunal of orders made pursuant to Section 27 of that Act: And the same was read the First time; and ordered to be read a Second time upon Friday, 20th February, and to be printed. [Bill 33].

BRITISH STANDARD TIME (ABOLITION) BILL

Mr. Godber, supported by Mr. Bryant Godman Irvine, Mr. Anthony Stodart, Mr. Peter Mills, Mr. Ian MacArthur, Mr. Michael Jopling, Mr. Hector Monro, Mr. Timothy Kitson, Mr. Deedes, and Mr. Keith Stainton, presented a Bill to abolish British Standard Time within the United Kingdom and to authorise the resumption of Greenwich Mean Time with variants as hitherto: And the same was read the First time; and ordered to be read a Second time upon Friday, 23 rd January, and to be printed. [Bill 34].

LAW REFORM (MISCELLANEOUS PROVISIONS) BILL

Mr. David Ensor, supported by Mr. Julius Silverman, Mr. Garrett, Mr. David Watkins, Mr. Norman Miscampbell, and Mr. Jack Dunnett, presented a Bill to abolish actions for breach of promise of marriage and make


provision with respect to the property of and gifts between, persons who have been engaged to marry; to abolish the rights of a husband to claim damages for adultery with his wife; to abolish actions for the enticement or harbouring of a spouse, or for the enticement, seduction or harbouring of a child; to make provision with respect to the maintenance of survivors of void marriages; and for purposes connected with the matters aforesaid: And the same was read the First time; and ordered to be read a Second time upon Friday, 5th December, and to be printed. [Bill 35].

REPRESENTATION OF THE PEOPLE BILL

Dr. Winstanley, supported by Sir Gerald Nabarro, Mr. Peter M. Jackson, Mr. Eric Lubbock, Sir Harmar Nicholls, and Mr. Brian Walden, presented a Bill to amend the Representation of the People Acts so as to require the issue of the writ for the holding of a by-election within a specified period from the date of vacation of the seat: And the same was read the First time; and ordered to be read a Second time upon Friday, 6th February, and to be printed. [Bill 36].

CRIMINAL JUSTICE (AMENDMENT) BILL

Mr. Anthony Berry, supported by Mr. Jasper More, Mr. David Crouch, Mr. Deedes, Mr. David Waddington, Mr. John Page, Mr. Eldon Griffiths, Sir Ronald Russell, Mr. John Astor, and Mr. Percy Grieve, presented a Bill to amend the Criminal Justice Act 1967 in relation to publicity for committal proceedings before magistrates' courts: And the same was read the First time; and ordered to be read a Second time upon Friday, 27th February and to be printed. [Bill 37].

INFANTICIDE BILL

Mr. Donald Coleman, supported by Mr. Leo Abse, Dame Irene Ward, Mr. James A. Dunn, Dr. Shirley Summerskill, Dr. Winstanley, Dr. Miller, Mr. W. T. Williams, Dame Joan Vickers, Mr. Ifor Davies, Mr. David Howell and Mrs. Lena Jeger, presented a Bill to amend the law relating to infanticide: And the same was read the First time; and ordered to be read a Second time upon Friday, 6th February, and to be printed. [Bill 38].

DISABLEMENT COMMISSION BILL

Colonel Sir Tufton Beamish, supported by Mr. Jack Ashley, Mr. John Astor, Mr. Lewis Carter-Jones, Mr. James A. Dunn, Mr. James Griffiths, Mr. Alasdair Mackenzie, Mr. Neil Marten, Mr Jasper More, Mr. Afred Morris, Dame Irene Ward, and Mr. Marcus Worsley, presented a Bill to establish a Commission to review pensions and benefits for the disabled and to make recommendations on changes and additions: And the same was read the First time; and ordered to be read a Second time upon Friday, 20th March, and to be printed. [Bill 39].

TRESPASS BILL

Mr. Peter Emery, supported by Sir Ian Orr-Ewing, Mr. Deedes, Sir Ronald Russell, Mr. Charles Fletcher-Cooke, Sir Douglas Glover, Mr. Peter Mills, Sir Eric Errington, Mr. John Osborn, Mr. David Howell, Mr. Albert Costain, and Mr. Patrick McNair-Wilson, presented a Bill to amend the law relating to trespass: And the same was read the First time; and ordered to be read a Second time upon Friday, 23rd January, and to be printed. [Bill 40].

COLLECTIONS OF MANUSCRIPTS (PRESERVATION) BILL

Mr. Marcus Worsley, supported by Mr. David Marquand, and Mr. Philip Goodhart, presented a Bill to encourage the preservation of collections of manuscripts by controlling and regulating their export and by amending the law relating to their acceptance in lieu of Estate Duty: And the same was read the First time; and ordered to be read a Second time upon Friday, 12th December, and to be printed. [Bill 41].

PARISH COUNCILS AND BURIAL AUTHOR ITIES (MISCELLANEOUS PROVISIONS) BILL

Sir Frank Pearson, on behalf of Mr. Michael Jopling, presented a Bill to amend the law relating to the administration and provision by parish councils of allotments and signs and of burial grounds by burial authorities, and for matters connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 30th January, and to be printed. [Bill 42].

LOCAL GOVERNMENT (FOOTPATHS AND OPEN SPACES) (SCOTLAND) BILL

Mr. Tom McMillan, supported by Mr. Gregor Mackenzie, Mr. William Small, Mr. Adam Hunter, Mr. John Robertson, Mr. George Willis, and Mr. Cyril Bence, presented a Bill to confer on local authorities in Scotland power to take over the control and maintenance of certain footpaths, and to construct and maintain certain footpaths; to authorise local authorities in Scotland to acquire or maintain certain open spaces; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday, 5th December, and to be printed. [Bill 43].

PROTECTION OF UNIT TRUSTS INVESTORS BILL

Mr. Keith Stainton, supported by Mr. Jasper More, Miss Quennell, Sir Ronald Russell, Mr. Bruce-Gardyne, and Mr. Raymond Gower, presented a Bill to amend the law affecting unit trusts and to make provision for valuations and financial liquidity as regards unit trusts investing in real estate, and otherwise to make provision about matters incidental to the protection of investors in unit trusts, and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday, 13th February, and to be printed. [Bill 44].

FIFTY-PENCE COIN WITHDRAWAL BILL

Mr. Turton, supported by Sir Donald Kaberry, Mr. Michael Clark-Hutchison, the Earl of Dalkeith, Mr. John Farr, Sir Ronald Russell, Mr. Julian Ridsdale, Mr. Bruce Campbell, and Mr. Alasdair Mackenzie, presented a Bill to provide for the replacement of the 50-pence coin by a note of the same denomination: And the same was read the First time; and ordered to be read a Second time upon Friday, 12th December, and to be printed. [Bill 45].

RACE RELATIONS BILL

Mr. George Currie, supported by Mr. Ray Mawby, Mr. Victor Goodhew, Mr. John E. Maginnis, Sir John Langford-Holt, Mr. Donald Williams, Mr. John Nott, Mr. Drayson, and Mr. James Dance, presented a Bill to amend the Race Relations Act 1968: And the same was read the First time; and ordered to be read a Second time upon Friday, 27th February, and to be printed. [Bill 46].

TRADE DISPUTES BILL

Mr. Ray Mawby, supported by Sir Frederick Bennett, Mr. Drayson, Mr. Victor Goodhew, Sir John Langford-Holt, and Mr. James Dance, presented a Bill to restrict exemption from liability to actions for tort to registered trade unions: And the same was read the First time; and ordered to be read a Second time upon Friday, 6th February, and to be printed. [Bill 47].

Orders of the Day — CUSTOMS (IMPORTS DEPOSITS) BILL

Considered in Committee.

[Mr. HARRY GOURLAY in the Chair]

Clause 1

AMENDMENTS OF CUSTOMS (IMPORT DEPOSITS) ACT 1968

3.48 p.m.

Mr. Michael Alison: I beg to move Amendment No. 1, in page 1, line 16, leave out 'two years' and insert 'eighteen months'.
One of the merits of this Amendment is that it writes the word "months" into the Clause and thus restores something of the; psychological impact which the Chancellor of the Exchequer clearly sought to give to the Bill at its birth. There is no doubt at all that the original concept of the Bill was of a short, sharp shock. The shock was quite specifically to be a direct reduction in imports on account of the difficulty and cost of obtaining credit, and the time scale—and I have no doubt that the Financial Secretary appreciates this point—of the original scheme was conceived in terms of months and not of years.
I make no apology for reminding the Committee that the Chancellor himself underlined this as being a matter of months rather than years when he said, on 22nd November, 1968:
The scheme is not one which can or should be kept in being for more than a limited period, but it will have powerful effects over the next few months when we most need its benefit."—[OFFICIAI REPORT, 22nd November, 1968; Vol. 773, c. 1796.]
I think that the Committee will see that it is for a good reason that we seek a form of words for the duration of the Bill which emphasises a monthly rather than a year long time scale.
Whatever else may be vague or uncertain about the impact of import deposits, it is abundantly clear that the scheme has not fulfilled the original expectations, either in terms of reducing imports or of making credit more difficult to obtain. It has perhaps made credit more costly to obtain, but hardly more difficult.
I will deal, first, with the argument about the impact upon imports. I could quote a great many Board of Trade and other statistics to make the point that imports of the non-exempted category of goods, so far from going down, have actually increased, but I will confine myself to one set of figures which gives us all the material we need to prove the point we are seeking to make. The figures were given by the Financial Secretary on Second Reading:
Since the scheme, imports of exempted goods have grown by 3 per cent. and those of non-exempted goods have grown by 6½per cent.
Prima facie, there is a clear rate of increase of non-exempted goods of about 100 per cent. They have increased at double the rate of exempted goods in the period since the import deposits scheme came in.
The Financial Secretary then gave us a long spiel, if I may put it as crudely as that, about how, relatively, he could argue that the rate of increase behaved—

The Financial Secretary to the Treasury (Mr. Dick Taverne): Did argue.

Mr. Alison: All right, I allow the Financial Secretary that point.
The Financial Secretary argued, and I hope to show totally ineffectively, that relatively the rate of increase of non-exempted goods over exempted goods has been marginally less in the period since the import deposits scheme came in as compared with the period between 1964 and the end of 1968, when import deposits started. But the argument which he has adduced, looked at coldly and detachedly, is a matter of pure semantics and attempted brainwashing. He said:
So the difference between the rate of increase in non-exempt and exempt goods has dropped from nearly three times to just over twice."—[OFFICIAL REPORT, 17th November, 1969; Vol. 791, c. 878.]
If one analyses that argument, it is like a couple of small boys aged 10, one of whom wants to pretend that he is a bit older than he is so that he can get into a cinema to see an X film, and the other wants to pretend that he is slightly younger than he is to qualify for cheap seats. The boy pretending to be older says that he is just a few months short of 11; the boy pretending to be younger says that he is only a few months over


10. They are both exactly the same age. The Financial Secretary argued that the rate of increase has dropped from nearly three times to just over twice, and this amounts to exactly the same thing, if one looks at it carefully.
Between the two periods the rate of growth of the G.N.P., which is the key, has dropped. The average in the period 1964–68 was about 2·1 per cent. to 2·2 per cent per annum, and in the period during which import deposits have applied the rate of growth has dropped by about 25 per cent., from over 2 per cent. to about 1½ per cent., that is to say, a quarter—

Mr. Joel Barnett: Mr. Joel Barnett (Heywood and Royton) rose—

Mr. Alison: The imbalance lies in the other direction. Against a reduction in the rate of growth of the G.N.P. of as much as 25 per cent. between the two periods the Financial Secretary gave us, we see that the buoyancy of non-exempt goods, which relate particularly to the products which one would look for in the context of economic growth, has barely gone down and has continued at twice the rate of the exempt goods. The Financial Secretary cannot pretend that the import deposits scheme, against the background of this severe decline in the rate of growth of G.N.P., has had a traceable effect. I believe that it has actually been perverse and has helped to make the goods buoyant.

Mr. Barnett: Is the hon. Gentleman arguing honestly? He said that this has had no effect on liquidity. He is now arguing that neither is it having any effect on the level of imports. Is he telling the Committee that it has not prevented even a marginal increase, which is all that the former Financial Secretary suggested that it would do?

Mr. Alison: The hon. Member forgets that the Chancellor of the Exchequer specifically said that there would be a direct reduction in imports. I have reminded him that exactly the opposite has happened: exports have gone up by 6½ per cent. which is twice the rate of the exempted goods.
As I sought to show on Second Reading, there is some evidence that there is a perverse factor at work, and that the

effect of import deposits has been to bring forward the stocking up by industry of goods which are subject to the import deposits scheme.
I turn now to the second argument to which the Financial Secretary gave special emphasis in his speech on 17th November. The Committee will note with some amusement the emphasis given by the Financial Secretary, in contradistinction to the Chancellor of the Exchequer, to what he described as
… its contribution to the successful policy of credit restraint."—[OFFICIAL REPORT, 17th November, 1969; Vol. 791, c. 872.]
The more one looks at the argument of the successful policy of credit restraint that the Financial Secretary elevated to the top position of his justification for import deposits, the more bizarre the argument becomes. If credit restraint was originally adduced, and it was adduced by the Chancellor of the Exchequer as a principal factor in the direct reduction in imports, and there has been no such direct reduction in imports—on the contrary, imports of non-exempted goods have tended to go up—it can hardly be argued that there has been a successful policy of credit restraint in the non-exempted categories. If the argument is that credit restraint is indissolubly linked to the success or failure of the import level of non-exempted goods, and if the level of non-exempted goods has continued to rise in terms of value and volume of imports, the argument about credit restraint has failed.
If the Financial Secretary is still talking about the contribution to credit restraint, where is the policy of credit restraint meant to bite? Is it meant to bite, if not on the non-exempt category, on the exempt category? Is it argued that although the import deposits scheme is having no effect on the non-exempted category, in a perverse way it is having an effect on the exempted category? If it is, there is a good argument for knocking away the import deposits scheme in the hope that the non-exempted goods will behave in the same way as exempted goods. Perhaps it is argued that the effect—

Mr. Taverne: The figures show that the exempted category grew faster relatively to previous periods than the non-exempted category. How does the hon.


Member reconcile this with the argument which he is advancing? I want to get his argument quite clear, so that I can answer it.

4.0 p.m.

Mr. Alison: It is simple enough to illustrate. The Financial Secretary said that they grew relatively faster. But when the figures are looked at carefully, they suggest that non-exempted goods grew at twice the rate in the period concerned as was the case with exempted goods. We are concerned with the relative rate of growth between the two categories.
I argue that the period which the hon. Gentleman adduces as that in which exempted goods grew relatively more slowly, namely, the period 1964–68, is a period in which the rate of growth of G.N.P. was much greater than the period during which import deposits have applied. Therefore, the drop in rate of growth of G.N.P. should have resulted in a very much slower rate of growth in non-exempted goods than has occurred. In a period of very low rate of growth in gross national product, one would expect there to be a much faster fall in the kinds of imports of goods which are essential for economic growth. But, on the contrary, the difference in the two periods is hardly perceptible, whereas the difference in the period with which we are concerned in regard to G.N.P. is 25 per cent. less. No doubt the Minister will deal with this matter in his reply.
I come back to credit restraint. Where is it meant to apply? It has had no effect, so far as one can see, on the rate of increase in non-exempted goods. Is the Financial Secretary arguing that credit restraint applies to the exempted category, or is he thinking in terms of the economy as a whole? His argument about credit restraint strikes me as being thoroughly "phoney" in its entirety. The lie to his argument has been given by a throw-away line in a different part of his speech, a line which was damaging to his case. First of all, in column 872, he gave a figure of liquidity of about £550 million at present held by Customs.
I am sure that the Financial Secretary would agree that it is reasonable to knock off a third as being the contribution made to those deposits by foreign suppliers. It can be said that, in round figures. some £400 million gross is tied

up by the import deposits scheme. But a couple of columns later, in column 875, he casually let out that we also know that in the June quarter the company sector added substantially, by about £300 million, to its net financial assets. First, there is the allegation that credit has been massively restrained by the net effect of the import deposits scheme by something like £400 million for a period of six months, but then the Financial Secretary says that the net financial assets in the company sector have increased in the June quarter by almost the full amount. That three-month period is half the period of the lock-up of import deposits. Those financial assets had increased in the one quarter by practically the whole amount of the import deposits.
One may well inquire where is the credit restraint effect of import deposits if the monetary and fiscal environment in which they operate is such that it can almost entirely affect that credit restraint by allowing sufficient liquidity elsewhere to acquire financial assets on that scale.
The Financial Secretary is misleading the Committee if he tries to persuade it that the credit effect, which has had no effect on the scale of non-exempted imports, justifies keeping on the scheme for a further 12 months as opposed to the period of six months which is the period for which we are asking. It shows the fatuousness of the Government's fiscal and monetary policy. They cannot pretend that a net tying up of £400 million in import deposits for six months means anything, when at the same time the Chancellor of the Exchequer had budgeted for a growth in domestic credit expansion of exactly the same amount. The credit argument in this context is meaningless.
It becomes increasingly difficult to see what conceivable grounds there are for the Government wishing to keep on this totally ambiguous and almost counterproductive Bill.

Mr. J. Bruce-Gardyne: Would my hon. Friend not agree that the fact there was a domestic contraction in the first quarter of the financial year is a factor which suggests that the overall movement of credit has been in a contractive direction? Although I accept all that he has said about the irrelevance of the import deposits scheme within the


overall picture, does the evidence not suggest that there has been a severely contractional process in operation this year?

Mr. Alison: My hon. Friend will appreciate that the D.C.E. figures fluctuate erratically on a quarterly basis and that the upturn in D.C.E. has already started. I am prepared to base myself on what the Chancellor of the Exchequer has said. He said that he saw no reason to believe that D.C.E. would not increase taking the year as a whole—and the year ends after the revenue quarter—by the figure which he originally adduced. One reason is that the private sector is to be a substantial net seller of gilts in the revenue quarter, which is the quarter in which the big D.C.E. figure will arise.
I have no doubt that the Chancellor's increase in D.C.E. completely offsets the credit restraint which the Chancellor has attempted to exercise through import deposits. Against this background of the ambiguous and perverse results of import deposits, what is clear is that our international trading partners do not like the deposits. I quote from the official communiqué issued after the E.F.T.A. Ministerial meeting on 6th and 7th November. There we read that the Ministers of other E.F.T.A. countries
… while welcoming recent evidence of the improvement in the economic situation of the United Kingdom, expressed concern at the continuance of the import deposit scheme.…
They might well express concern when one sees that in the third quarter of 1969 our imports from E.F.T.A. countries rose by 8 per cent. and our exports to those countries rose by nearly three times that volume, namely, by 22 per cent. If they have any wish to try to adjust the rate of growth of trade between the two blocs, does the Financial Secretary believe they will not be tempted to have recourse to the same instrument which we have used to beat them with and that they themselves will not impose import deposits? This is the reason why the period should only be extended for six months less before they themselves get into the habit.
I am happy to let the Chancellor of the Exchequer have the last word on the subject. He was in a rather defensive mood this afternoon. He attempted to suggest that he could never rely on the

Opposition for any consistency. I remind the Financial Secretary of these words by the Chancellor of the Exchequer at the end of the Budget debate in April, 1963:
It is extremely important that, at the outset of this period, Her Majesty's Government, of whatever party, should say, 'We are for expansion. We want to go on with expansion, and we want world monetary and trading policies which will help us. We shall not ourselves turn to restrictive measures of a monetary, tariff or restrictionist sort on imports unless we are absolutely forced to do so. We appeal to others to work with us to make this expansion possible.'"—[OFFICIAL REPORT, 8th April, 1963; Vol. 675, c. 1005.]
What a background to this tawdry little Measure, introduced when the Government are achieving a rate of growth of under 2 per cent., and when, in that speech, the Chancellor of the Exchequer himself advocated a rate of growth of 8 or 9 per cent. against a background of decrying monetary, trading and fiscal restrictions on imports. The Chancellor now brings forward this tawdry little Bill, which seeks to extend the clearly ineffective 12 months' initial period by another 12 months. The least we can do is to ask the Committee to agree to cut by six months the period of extension proposed.

Mr. Donald Chapman: The hon. Member for Barkston Ash (Mr. Alison) does himself no justice at all by that kind of speech. To pretend that economic analyses are as simple, as straightforward and as easy as he has been making out is little short of puerile. The first part of his argument was that as there was slow growth in the national gross product during this period one should expect the sort of slowing down of imports that has taken place. I believe that to be a fair summary of what he said. He says that therefore, in those circumstances, the import deposits scheme cannot have any effect. However, as his hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) almost reminded him, things are a lot more complicated than that.
In fact, we have to look at all sorts of factors in the rate of growth of imports. The rate of growth of imports depends, in addition to the things about which the hon. Gentleman has been talking, on relative price movements of imports and exports. It depends on the restructuring


of the economy which has been going on, during which period it is possible that, despite the low growth in the gross national product, stock building has been proceeding as a basis for future exports. It depends on credit generally.
The hon. Gentleman does not do himself justice. After all the experience we have had during the last 15 years of erratic import figures which are, so to speak, one of the national crosses we have to bear in the modern day, after years of trying to cope with erratic import figures which have continuously bedevilled our balance of payments, it is just not good enough for the hon. Gentleman to say that it is all very simple, and that none of the steps, such as this Bill, that we have taken can be having any effect—

Mr. Bruce-Gardyne: I interrupt only to say that the views the hon. Gentleman appears to be attributing to me were not expressed by me.

Mr. Chapman: The hon. Gentleman was making it clear that he was having a number of second thoughts about the simplified approach of his hon. Friend. But if he wishes to opt out of the argument, I do not need to call him in aid.
The hon. Member for Barkston Ash seems mesmerised by the statement made by the Chancellor of the Exchequer some time ago that the import deposits scheme would lead to a cut in imports. The hon. Gentleman seems to want to imply all the time that my right hon. Friend was saying that the scheme would lead to an actual physical fall in the total of imports. I do not think that my right hon. Friend was ever so stupid as to say or to imply anything of the kind. We have lived and are living in a period of rising imports, and world inflation alone will increase their cost each year even though the volume remains the same. What my right hon. Friend was saying was that the scheme would lead to a slowing down in the growth of imports, if growth were taking place, as would be the natural thing to expect in modern circumstances. I do not think for a moment that he ever wanted to imply that there would be a fall in the volume, and hence in the total value of imports.

4.15 p.m.

Mr. Alison: The hon. Gentleman must recognise that this is what the Chancellor of the Exchequer in the light of after events would have liked to have said, but what the right hon. Gentleman actually said was that the scheme would lead to a direct reduction in imports.

Mr. Chapman: We have to take the whole context of the speech, which dealt with the national problem of a general, steady and never ending growth in our import bill. I would say that any Chancellor who ever said that he expected a small Measure like this to lead to a fall in the volume, and hence a fall in the total value of imports, was off his head, and whatever else my right hon. Friend may be he is certainly not that. He was talking in the total context of a fall in growth.
We are arguing here about something much more puzzling, delicate and complicated than the hon. Gentleman made out. We are discussing how we may get together a package of measures of control over our balance of payments which makes sense in modern circumstances. That is why I put down an Amendment which would have continued the scheme for five years. I wanted to use it as a peg for a speech on the need for the Bill as part of our general armoury in fighting for balance of payments control, but I can make the same remarks on this Amendment, which seeks to reduce the period.
What is at stake in arguing about how long the scheme should operate is our view of how we regulate the balance of payments. The distressing thing about the members of the Opposition Front Bench, who seem very light-headed about a number of things, is that they seem to imply that all this is very easy; that we can cut taxation, have a free-for-all, leave the import level to take care of itself and then suddenly, miraculously, happily and all too easily there will never be any trouble with balance of payments.
The reality is that there are no soft options in economic policy, and both sides of the Committee should have learnt that by now. Pre-1964 we had a situation in which each time the balance of payments refused to come right we had a stop on production, on investment, on social spending and on full-time working,


which reached a point in 1961–62, in the time of the right hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd), of utter disillusion in manufacturing industry, and a feeling that the ecnomy would never get right and restore confidence. In between, when this dreadful purgative medicine had had its effect, we had the alternative of a rather wild boom which we continually "kidded" ourselves could be kept in hand. When we found that it could not be kept in hand we were back to the old purgative of violent measures, destruction of confidence, and the rest. The result was an all-round lack of confidence in our economy.
I do not, and could not, claim that since 1964 we have found an easy alternative. But we have found an alternative which is working and is not having the disastrous pre-1964 effects. [Interruption.] The right hon. Member for Enfield, West (Mr. Iain Macleod) may splutter, but he should talk to his friends in manufacturing industry. There is no lack of confidence in British industry today. We are managing to cure the balance of payments deficit and to move into surplus without destruction of confidence while laying the basis for a steady acceleration of growth which will now take place in annual production.
So the option we have chosen as an alternative to a general recession of the stop-go type of 1961 is to try to get the economy in hand by using a package which has three features: a restructured economy slanted towards exports; slightly less full employment—less than I should like, but only slightly less—and a package of measures at home to hold back demand in imports. That package includes tighter money, a Budget surplus and things such as the import deposits scheme.
This scheme is part of the total package we are using in a more sophisticated way than, for example, the right hon. and learned Member for Wirral used in 1961–62, to bring right the balance of payments situation while, at the same time, not destroying confidence—and while positively laying the foundations for more acceleration in growth of our national economy. That is why I stick to my view that the Amendment is quite wrong; that the reverse is exactly what

we need. We need to have this measure as part of our total permanent armoury so that, if an occasion like this arises again when unhappily we drift over the margin in the balance of payments situation, we can use this set of gentler measures, including this one, to bring the balance of payments right without total destruction of confidence which always went with the stop-go policies pre-1964.
This is why I want this measure permanently on the Statute Book and why I complain against the Government for being so timid in falteringly putting it forward year after year at present, and why they say that we ought to get rid of it. We ought to have the power, never to use it, of course, in circumstances when we do not need it, but provided for use at will when something of this kind is needed on the margin.
I come to the marginal point. The hon. Member for Barkston Ash still fails to realise the smallness of what we are trying to do. We have a total export-import Bill of about £12,000 million, £13,000 million, £14,000 million. Inside that figure we were stuck with a balance of payments deficit of about £200 million. This was the crucial figure which we could not get rid of, about 2 per cent. We were annually looking for little measures to get round the corner, as we said a year ago; and we had to do something because we had had this adverse margin for a long time. This was part of the general measures to get round that corner.
On Second Reading, I quoted something which I had said last year. Now I want to quote something more. I said:
We are talking about trying to get a change at the margin. In £6,000 million"—
I could have said £12,000 if we take exports as well as imports—
we want to cut out or delay £200 million."—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 847.]
This is marginal and that is why this measure is so important and why it is effective, because we were never looking for more than very slight effects of a small size.
I tried to deal with the point about E.F.T.A. when speaking on Second Reading, but I evidently failed to make an important point for the hon. Member for Barkston Ash, who has been so loud in his complaints about what E.F.T.A.


countries were thinking. He does not realise that the E.F.T.A. Secretariat, not many months ago, produced a report—we debated this at Strasbourg—showing the fantastic success of E.F.T.A. and showing how, over the years during which E.F.T.A. has been operating, the exchange of goods between the Seven has accelerated at a phenomenal rate.
The hon. Member ought to think of the reaction of E.F.T.A. parliamentarians and Ministers. When they see a trading arrangement which is working so well, when they calculate—as they are sensible enough to do—the steady increase in exports to the United Kingdom which they have achieved year in and year out during E.F.T.A.'s existence, they are not likely to cavil fundamentally at something which restrains it within the level of what we in the United Kingrom can afford to pay for by our exports.
The hon. Member still fails to realise the point about a cut in volume and a cut in the rate of growth. If we had been physically cutting our imports from E.F.T.A. they would be shouting, but all the E.F.T.A. countries know that we are restraining the rate of growth of goods from E.F.T.A. countries and they are happy with that situation. [Laughter.] The hon. Member may laugh, but E.F.T.A. countries have memories of what happened under the Administration of hon, Members opposite. Under their Administration, there would have been not this cut but a swipe, another version of stop-go, which would have meant a much more severe cut in their sales to us than all our measures as epitomised in the Bill.
I am sorry that the Government, in introducing this Measure, are still failing to come before the House and to say, "We do not want to use this Bill any more than is necessary, but it is honestly part of a total package of the gentler kinds of restraints needed to run a modern economy". Let us have it on the Statute Book permanently. Let us have the power to use and revive it only when we need it and so that we do not need to have these annual debates when we need the power. That would be a more sensible way of doing it.
I hope that when my hon. and learned Friend replies to the debate he will deal specifically with the question why the

Government will not take my view and put this Measure permanently on the Statute Book.

Mr. John Nott (St. Ives): The hon. Member for Birmingham, Northfield (Mr. Chapman) has practised on himself an act of supreme self-deception. When the Financial Secretary to the Treasury gets up the next rung of the Treasury ladder— he is progressing very well and fast—the hon. Member will have to take his place, or the place of the Minister of State. Such acts of self-deception are badly needed on the Treasury Bench. For the hon. Member to describe the Government's total package as a mild one—I believe that that was the expression he used—is astonishing.
The Government's total package has resulted in a small surplus on the balance of payments for the first time in five years, but it has come about following devaluation of the £, higher unemployment than this country has known since pre-war times, a lower growth rate than there has been for the last 24 years, and debts of £3,000 million which this party will have to repay after the next General Election. If the hon. Member really believes that is a mild package, what would he describe as a severe one? I found his attitude very strange indeed.
To bring myself up-to-date, I took the opportunity today of speaking to one or two E.F.T.A. embassies in London. I assure the hon. Member that the feeling of distress and anger that the Government should continue this measure for a further year is very considerable among the E.F.T.A. countries. Most of them agreed when it was introduced that perhaps it was introduced force majeur. But now that the Government, who are so euphoric about the enormous success of the balance of payments, are continuing it, for reasons which we well know and to which I shall allude, I assure the hon. Gentleman that they are continuing it against the strong opposition of every E.F.T.A. country.
4.30 p.m.
I do not know why the hon. Gentleman wants such a measure to be in this country's total permanent armoury. If Britain remains, as I hope that it does, a major trading nation, it cannot be part of our total permanent armoury to have something which is, as the Government


admit, liable to restrict world trade. Whatever view may be taken of an import deposit scheme, it cannot be said to be an extension of the liberalisation of world trade from which Britain will benefit more than practically any other nation.
The reason this measure has been extended was made perfectly clear in the Financial Secretary's comments on Second Reading:
It is clearly, therefore, a matter of common sense"—
this is the nub of the whole thing; the hon. and learned Gentleman associates common sense with the Labour Party's electoral prospects—
to avoid at this particular time, in the next half-year, a monthly outflow from the reserves of £30 to £40 million which this foreign credit has represented."—[OFFICIAL REPORT, 17th November, 1969; Vol. 791, c. 876.]
That is the nub of the issue.

Mr. Chapman: One of the three.

Mr. Nott: That is the major political reason for the extension of the scheme. If the Government take it off now, £30 to £40 million a month will flow out of the reserves. We all know why the Government are extending it. The Financial Secretary said so. It is no use the Government's being, on the one hand, so euphoric about their great three-month balance of payments success, which has amounted, if I calculate it aright, to a surplus of approximately £65 million over three months—I am talking about current account surplus—

Mr. Taverne: Trade surplus.

Mr. Nott: I am sorry—trade surplus over three months.
It is the trade surplus to which the Government have been directing most of their comments recently. It is not good the Government's being euphoric about that, on the one hand, and then the Financial Secretary saying, "If we took the import deposits scheme off £30 to £40 million a month would flow out of the reserves". That would more than cancel the three months' very desirable and satisfactory current account trading surplus of £65 million which we have achieved over the past three-month period.

Mr. Taverne: The hon. Gentleman surely would not underrate the importance of the invisibles.

Mr. Nott: I never underrate the importance of the invisibles. They are very important indeed. I did not, however, refer to them. The Financial Secretary thinks of this import deposits scheme rather like pot—not "impot". He may refer to it as "grass" as a result of his wide experience of this subject when he was at the Home Office. The scheme is like pot, because it is a stimulant which, once tried, is very difficult to give up because the withdrawal symptoms from the scheme are very unpleasant. This is why the Government are keeping the scheme on.
I do not want to be led into discussions now on the question of the expansion or contraction of credit. I follow the arguments advanced by my hon. Friend the Member for Barkston Ash (Mr. Alison) with interest, but I did not wholly agree with all of them. There will be other opportunities of speaking on this subject in this sparsely attended debate.
In supporting the Amendment, I want to comment on one specific industry. I take the machine tool industry as but one example. Day by day the Government talk about the importance of expanding our manufacturing capacity and of the need for further investment. We all agree that this is crucial because, as soon as the brakes come off, if we have insufficient capacity Britain will once again run into a huge balance of payments problem as a result of more imports being sucked in. The expansion of capacity, particularly of more modern plant and machinery, is absolutely crucial to our future.
I take one industry which I know something about, because I am connected with it—one portion of the engineering industry. As the Financial Secretary knows, the engineering industry is doing very well at the moment and is running very much at full capacity. The company with which I am associated—there are many similar companies in the economy—has increased its exports by about 60 per cent. in the last two years. The figure runs into many millions of pounds. It is not due to any efforts of mine. It is due to the efforts of those who are employed full time in the company.
The capacity of the company is extraordinarily short. The only way in which we can continue to meet the overseas demand for our products is by ordering the


very latest, the best, the most heavy-purpose machinery in the world. We can buy the very best machinery in the world only if we are allowed to look around, check on what is the best machine tool produced by the Swiss, the Germans or the French, and buy the very best tool wherever it might be made. [Laughter.] The hon. Member for North-field laughs. He must agree that this is correct.

Mr. Chapman: I am sure that it is right, but why does not the hon. Gentleman tell this to the hon. Member for Barkston Ash (Mr. Alison), who thinks that at the moment imports should be automatically going down because there is not such a good growth in the gross national product? The hon. Gentleman is now telling the hon. Member for Barkston Ash about all the complicating factors which go to the make-up of our import bill at the moment. At the same time, he is telling us how confident and buoyant the engineering industry is despite what he thinks are the terrible things that the Labour Government have been doing.

Mr. Nott: My hon. Friend did not comment along the lines that the hon. Gentleman suggests. The hon. Gentleman completely misunderstood what my hon. Friend said. The hon. Member should not refer to the simple figures which my hon. Friend mentioned, because my hon. Friend was merely commenting on the figures which the Financial Secretary used to demonstrate his case. The Financial Secretary took the figures of imports, took the non-exempt and the exempt items, and took an extremely simpliste figure to demonstrate that perhaps this scheme was having a marginal effect on imports.
My hon. Friend was merely commenting on the simpliste figures which the Financial Secretary took to demonstrate his case on Second Reading. I do not know whether the hon. Gentleman has read the speech made by the Financial Secretary on Second Reading. The hon. Member may not have been present during the debate. The Financial Secretary took the figures to which my hon. Friend the Member for Barkston Ash referred, to demonstrate that there had been a marginal reduction in imports. Why does the hon. Member criticise my hon. Friend for referring to those figures?
I return to the question of the engineering industry, which I amdit is doing very well. I do not know if the Government attribute the engineering industry's success to some measures which they have taken. I do not know what measures those could be. For the engineering industry to do well and meet the demand for its products, it must buy the very best machine tools wherever they may be throughout the world.
This means purchasing machine tools abroad in certain cases—not in every case. Companies in Britain which are seeking to meet the demand for their products must either pay the import deposit themselves for buying the machinery or they have to pay approximately 3 per cent. more on the price of these foreign machine tools. At a time when the Government are trying to encourage foreign investment in Britain, it cannot be in the interests of our export trade to put this additional impost upon imported machine tools. I return to my original comment. We know why the Government have done it. They have done it because they have a small balance of payments surplus to crow about for the first time in four years, and they know that if they release the import deposit scheme now it will, as the Financial Secretary said, lead to an outflow from our reserves to the extent of £30 million or £40 million a month.
I come to the nub of all the Government's actions, and this is the last point that I wish to make on this Amendment, unless the Financial Secretary provokes me into a further comment on this issue. It is this. One day the import deposits scheme has got to come off, and one day the £30 or £40 million has got to go out of the reserves. When will that happen? Will it remain till after the election? The Government have put round the necks of any future Government—I believe that it will be the necks of my party—the Basle Agreements.
We also have the Deutche mark borrowing of the local authorities. Every single action that the Government have taken in the economic field in the last six months to a year has been calculated to meet the short-term balance of payments position, quite regardless of the medium and long-term effects on our economy.
The Financial Secretary in his Second Reading speech referred to comments which I made on the original Ways and Means Resolution. I do not intend to bore the Committee by commenting on it now, but I shall come back to it later. What I predicted then—contrary to what the Financial Secretary said—has come true. Among the comments I made was that the scheme would improve our balance of payments in the short term. But the Measure will do considetable medium and long-term damage if it remained, and this is the problem which we should be discussing—not the immediate short-term effect which is only beneficial to the Government in their attempts to win the next election, not to the country at large.

Mr. Bruce-Gardyne: I entirely agree with my hon. Friend the Member for St. Ives (Mr. Nott) that one of the main reasons for the Government's request to us to renew this miserable little measure is in order to continue the process of shovelling their accumulated debts and their effect on to the next Conservative Government. Of course, this is right, and it is right to draw attention to the interest of the Government in escaping from the particular consequence of what my hon. Friend aptly described as the withdrawal symptom from this import deposit drug.
The Financial Secretary held up his hands and waved three fingers when my hon. Friend referred to this as the reason. I do not agree that there are three reasons. I think that when we were discussing this matter on Second Reading I suggested there were four, but I will content myself with two this afternoon. I will come back to the second one in a moment.
First, I want to draw attention to one argument which seems to me particularly to favour this Amendment. It is an argument which has not been referred to during the debate today. The hon. Member for Birmingham, Northfield (Mr. Chapman) seemed to have no knowledge of the fact—but then, that is hardly surprising since the Financial Secretary showed no awareness of it on Second Reading—that the application of this Act, if it is to continue for a year, will run through the period when, according to

the Government, we shall be opening negotiations for membership of the European Economic Community. I do not know where the hon. Member for North-field stood on this issue. I have not checked my facts, but I have no doubt that the Financial Secretary voted with the rest of the payroll vote.
If we are to have the opening of negotiations for entry into full membership of the European Economic Community I can only suggest—to use a word which was so happily used by my hon. Friend the Member for Barkston Ash (Mr. Alison)—that it will look a little bizarre for us to have this particular form of financial restraint on imports in operation. I presume that the Financial Secretary will be trotting in the wake of the Prime Minister around the capitals of Europe, and that when the Prime Minister is told, "You understand, of course, that the purpose of this organisation is to eliminate barriers to trade, and yet you have got a rather nasty little barrier still operating which is against all the rules", the Financial Secretary will be there presumably to say, "Oh, yes, but it is only a little one and it is only temporary".
4.45 p.m.
The Financial Secretary's position would be a little happier if he were to accept this Amendment. At least, he would then be able to say, "Wait till June and then we shall remove this little indiscretion which we have committed and prolonged". If the Financial Secretary does not accept this Amendment it will be up to him to explain to the Committee how he will justify the retention of this Measure during a period when what we are led to understand are vitally important negotiations are to be undertaken, being negotiations which are totally in conflict with the spirit and the letter of the Bill.
I also strongly support the Amendment because I disagree profoundly with what I regard as the second and ancillary reason for the Government's decision to seek renewal of the Customs (Import Deposits) Act. This is tied up very much with the reason to which my hon. Friend the Member for St. Ives (Mr. Nott) referred, because it is related directly to the balance of payments situation. This is the reason on which the Financial Secretary himself placed great emphasis in


his Second Reading speech, namely, the restriction of domestic credit.
I agree with my hon. Friend the Member for Barkston Ash that a measure such as the import deposits scheme is, in isolation, strictly irrelevant to the overall measure of control which one applies to domestic credit. Obviously, the whole effect of retaining the import deposits scheme can be reversed simply, without any action taken officially by the Government or requiring the sanction of this House, by such a measure as, for instance, a decision to release the special deposit accompanied by a decision by the Government or by the gilt-edged broker to go into the market and buy gilts. This alone would wipe out any effect that the import deposits scheme would have in restraining domestic credit.
Equally, the Government could decide, as they are urged by the hon. Member for Heywood and Roy ton (Mr. Barnett), to advance the payments of these titbits to the unprofitable—the investment grant. This would also have a not dissimilar effect. Therefore, I entirely agree with my hon. Friend that to single out the import deposit scheme as being an essential instrument for restraining domestice credit expansion shows a lamentable inability to understand the whole theory of money supply—not that I find that in the least surprising, coming from a Chancellor who throughout has shown total ignorance of and disinterest in the whole subject, although he has been frogmarched by the Treasury into pretending to apply these disciplines which he cannot be bothered to try too understand.
What seems to be important is this—and this is my main reason, perhaps, for being only too delighted to support this Amendment in the Lobby this afternoon. I refer to the renewal of the import deposits scheme as a very sinister and specific piece of evidence of the Government's strategy.
It is doubly related to the departure of the Paymaster-General from the Treasury. If the Paymaster-General had still been at the Treasury, he would never have allowed this Bill to be renewed in flagrant contravention of undertakings given by him to the I.M.F. which he would certainly have ensured were fulfilled. He is a man of honour,

and he would not have allowed the Bill to be renewed in this way.
The right hon. Gentleman would have ensured that the Bill was not renewed for another important reason. The Paymaster-General was always insistent that we should not allow the achievement of some magical, ever more impressive balance of payments surplus to become a sort of national obsession. I used to think that he was somewhat premature in that line of argument. I thought that we should be better advised to move in to surplus at least before we started to run down the size of the balance of payments surplus at which we were aiming. But at this stage it seems to me that in the absence of the Paymaster-General's guiding hand the Chancellor has become absolutely obsessed by the need for some ever more glamorous and glorious sounding balance of payments surplus, regardless of the impact which that may have on the economy.
The decision to renew the import deposits scheme should be seen in that light, as an outward and visible sign of an inward and invisible determination on the part of the Treasury to pursue a degree of severity in credit restraint designed to achieve an ever more inflated balance of payments surplus regardless of the effect on the economy at home.
We must regard the impact on domestic investments of the proposal before us against that background. I was interested, but profoundly alarmed, to read a reply by the Chief Secretary to a Question by my hon. Friend the Member for Oswestry (Mr. Biffen) yesterday, when my hon. Friend asked the Chancellor of the Exchequer,
what assessment he has made of the general effects of the Government's monetary policy; and whether he will now dismantle certain selective methods of monetary restraint"—

The Deputy Chairman (Mr. Harry Gourlay): Order. I remind the hon. Gentleman that we are not having a Second Reading debate. We are dealing with an Amendment to Clause 1, in line 16. Perhaps he will address his remarks more specifically to that Amendment.

Mr. Bruce-Gardyne: Certainly, Mr. Gourlay. The point I am seeking to make is that the effect of renewing the Bill without—

The Deputy Chairman: The point is that we are not discussing the Bill. We are discussing an Amendment. The principle of the Bill has already been established by the House.

Mr. Bruce-Gardyne: I accept that, Mr. Gourlay, but the point which I am seeking to advance is that, if we were to approve the Bill without the Amendment, the effect would be still more severely to restrain domestic credit, with the ancillary effect on manufacturing investment. I was drawing attention to the exchange between my hon. Friend the Member for Oswestry and the Chief Secretary precisely because, as I hope to show, it suggests an alarming degree of complacency in the Government about the effect of deciding to renew the import deposits scheme in all its vigour for a full year, as opposed to the restricted time suggested in the Amendment.
My hon. Friend drew attention to the fall in liquidity in British industry of about £70 million to £80 million, disclosed by the November Financial Statistics, and he asked the Chief Secretary:
Is he aware that that will have considerable consequences for the level of industrial investment?".
The Chief Secretary replied:
There is no question of complacency."—[OFFICIAL REPORT, 25th November, 1969; Vol. 792, c. 193.]
Throughout some years of watching the Chief Secretary in operation, I have always regarded him as a pillar of complacency. [HON. MEMBERS: "NO."] Yes, he used to pretend that the rate of growth in the money supply was totally irrelevant, right up to the day when the Chancellor said that it was at the basis of all his preoccupations. There has been a dangerous degree of complacency about the domestic internal effects which a continuation of this measure for another full year might have on our manufacturing investment.
To conclude, I hope that the Financial Secretary will answer a question which he was asked on Second Reading but to which he never replied. Before rejecting this Amendment, as, no doubt, he will ask us to do, we must have a reply to this question. Why did the Government decide to change their mind about the renewal of the import deposits scheme between July—and the Chancellor's

Letter of Intent to the I.M.F. which he told us was based on the calculation that the import deposits scheme would not be renewed—and October, when he decided to renew it? What occurred in the interval to persuade the Government to change their mind? If we are asked to renew the scheme for a full 12 months, we should have an explanation of that last-minute change in the Government's thinking.

Mr. Ted Leadbitter (The Hartle-pools): Having spoken on this Bill on a previous occasion, and having heard the debate today, I find it exceptionally difficult to say anything new. One of the difficulties, even with the Amendment before us, is to discover any new feature which could sway opinion on one side or the other. But there is one thing quite certain: when an Amendment of this kind is put down, reducing a period of two years to 18 months, either we accept the intent of the Amendment as sincere or we do not.
If therefore, it is the Opposition's case that the Bill is wrong, basically wrong in itself, one must question why the Amendment is there. On the other hand, there is another option. Hon. Members opposite might be split; some might believe in it, and some might not, so their Front Bench put down an Amendment. I notice that the right hon. Member for Enfield, West (Mr. lain Macleod)—I am sorry that he has left—sat there quite placid and content, and it did not seem to be a moment of great import to him. Nevertheless, he will have noticed, as I have, that hon. Members opposite, whether they like it or not, have argued sometimes in favour of the Bill and sometimes not.
When we have this kind of mix, one wonders at the small attendance in the Chamber. Apparently, for some hon. Members the Bill creates a great crisis. To others, it is a small marginal thing, as some of us would like to describe it. But, looking at the numbers at present in the Chamber, one is forced to conclude that, perhaps, the right hon. Member for Enfield, West, was wise to leave. There is one constant to be discovered even among a split, poorly-attended assembly. Hon. Members opposite are forever drivelling that when things are going right that is the result of private


enterprise, and that when they are going wrong that is the Government's responsibility. They have neither grace nor common sense on this subject.
5.0 p.m.
When we think in terms of the marginal improvement from the Bill, which helps us turn the corner, against a general background of imports and exports worth well over £12,000 million, and bear in mind that we are dealing with £3,000 million of that, we find it surprising that there can be hon. Members opposite who will minimise the significance of the Government's calculated intention.
The background to the problem has confused politicians for decades. When did we last have a favourable balance of trade? I think that it has happened about seven times in the past 175 years. When did we last have a balance of payments surplus? We have to be long in the tooth to be able to look back to a balance of payments surplus which really meant anything. The country's whole dilemma has been how best to deal with the changing situation of Great Britain in the world, against the background of two world wars.
Politicians on either side would be foolish to think that from a little debate like this there could emerge the panacea whicvh has confounded the statesmen of past years. They would be much wiser to address themselves to what this little Bill really tries to do. One hon. Member opposite said that if we did not have the Bill the result would be to take £30 million out of the reserves, and he said that that was my right hon. Friend's reason for reintroducing the measure. He placed that figure against the balance of trade surplus of £65 million over the past three months, did his simple arithmetic and said that accordingly, if we did not introduce the Bill for a second period, instead of being in the black we would have been in the red over the past three months. That kind of stupid thinking is as dangerous to this country as the B.M.A. saying when it wants a salary increase, "We can stop the health service". Anyone with an irresponsible state of mind can do that sort of trick and come to the conclusion that he can hold someone to ransom.
Hon. Members opposite should have been saying that they are pleased that this country is in the black for the past

three-month period for the first time. Whatever the circumstances and their political fortunes, they should be willing to be big enough to say that after many years of our trying to bring the country into a state of surplus the trend is now there, and the Government's intention to keep it ticking along in that direction must be good.
Therefore, it is unwise of them to put down an Amendment such as the one we are discussing. It exposes the Opposition to considerable criticism in the country. The hopefulness of hon. Members opposite is confused with the kind of promises they offer. I said in a Committee debate on another Bill only this week that their promises on taxation and cutting down public expenditure seemed to outbid the Magnificat. Some of the things I have heard in the debate on this Bill seem to outstrip not the Magnificat but the Sermon on the Mount.
We are dealing particularly with trading relationships, with trying to control the increase in imports. If hon. Members opposite try to get away with the suggestion that we are not dealing commercially fairly with the E.F.T.A. countries, let me tell them that this country's behaviour is a hallmark of good conduct in international trading. Only today I was told that a country receiving aid from the United Kingdom will give a contract in this country only with certain conditions attached.
Time and time again over the past year, as the Chairman of the Estimates Committee's Sub-Committee on Exports, I have had evidence brought to me of the practices of other countries. Therefore, the Sermon on the Mount philosophy of hon. Members opposite is contradictory. Never in this Chamber should an hon. Member try to place the trading practices of this country on a lower level than those of the rest of the world, though that has happened time and again.
I am grateful to have had the opportunity to intervene again in our debate on the Bill. I have been interested in the Bill, and I am concerned that this country shall continue to work more and more towards a better and increasing balance of payments surplus. I should be very sorry if the good start the Bill has had does not continue. There needs to be a continuing scrutiny of its effects, certainly on small companies. It is not


a question of passing a Bill and then waiting to have some reckoning up. There must be a continuing dialogue on it. But hon. Members opposite should for once say to the country that they too are pleased that the Government, with a whole package of measures, have produced a balance of payments surplus which, for the sake of our nation, we all hope will continue.

Mr. Kenneth Baker: What I find most objectionable in the Clause, which the Amendment does something to mitigate, is that the Government have not so far put forward a case for extending the imports deposits scheme for a day, week or month, let alone a year. That is why we seek in the Amendment to restrict the scheme to a further six months.
The argument put forward earlier was that the scheme, if it operates in the next year, is a fine economic tool. That was the argument of the hon. Member for Birmingham, Northfield (Mr. Chapman), who referred to it as a sophisticated tool of economic management. But if one does not know the precise effect of an economic tool one should not use it, and the Government do not know. If one asks any Minister, including the two in the Chamber, to what extent the scheme has inhibited imports, they will not give an answer. If one asks, "Why did you choose 40 per cent. instead of 30 or 20 per cent.?", they will not give an answer, because they do not know. They are legislating from ignorance, and that is what sticks in my gullet. To call the scheme a sophisticated economic tool is to stretch credulity to the point of complete naivety. It is not. It is a blunderbuss with very marginal effect on imports. But it has a greater effect on domestic liquidity.
On Second Reading, the Minister of State said, in effect, that he could not give facts as to why we should have the scheme and asked us to trust the Government's economic judgment. That, after five years, is a bit of a nerve. With this scheme, the Government are groping in a fog and know they are. They have no idea of the economic weather. They are trying to judge it with a sundial set the wrong way round. This means that, whenever the sun comes up, they think that it is going down, and whenever

it is going down, they think that it is coming up. This is what we have had for the last five years and it is what we have in the Bill.
The major point of the Amendment is the way company liquidity is being affected by the scheme. It is the most serious point of the debate and is tied up with the time factor with which the Amendment is concerned. The Government are holding about £550 million of British industry's money under the scheme. That is a great deal of money. The November issue of Financial Statistics showed that the liquid assets of United Kingdom commercial and industrial companies over the 12 months between June, 1968, and June, 1969, fell by £80 million. Since June, 1969, they have probably fallen dramatically more. Thus the Government, with this scheme, the corporation tax increase, the S.E.T. increase and the increases in National Insurance contributions levied only this month, are taking out of industry's cash flow £550 million.
I believe that this is affecting companies in two ways. There is growing evidence that companies are reducing their investment programmes and also growing and disturbing evidence that they are cutting research and development programmes. Research and development is often one of the first casualties in a cash crisis in any company, and I believe that, if we could get the Government to repay to industry this £550 million at the end of six rather than 12 months, it would be a great boon.
I do not believe that this would have the super inflationary effect which the hon. Member for Ashton-under-Lyne (Mr. Sheldon) argued that it would on Second Reading. It certainly will have nothing like the inflationary effect that the 25 per cent. increase in wages of building workers and the 20 per cent. increase for airline workers will have.
To emphasise my argument, I give a specific example from the Press. Rolls-Royce, one of our great industrial companies has, I would estimate, a substantial amount of money paid in import deposits to the Government. Perhaps Ministers know how much and will be prepared to tell us. But it must be millions, if not tens of millions of pounds. Yet the company, in its own newspaper, explained to its workers that there is a


considerable crisis and that basically it is a cash crisis.
What is extraordinary is that, to get out of this cash crisis, the company is having to go to the Industrial Reorganisation Corporation to borrow money. Thus, on the one hand, the Government, through this scheme, suck money from the company and, on the other, force it to go to the I.R.C. to borrow back its own money. That is something which even Shylock did not think of. It is almost a contravention of the Moneylenders Act, but it is what is happening.
More and more companies are being placed in this position. I believe that the Chairman of the I.R.C. has sent out a letter offering loans to British industry— the very companies which are having to pay import deposits. He is saying to them, "The Government have taken your money and have not paid a penny to you for it. They are keeping it for six months or a year. However, we will lend you some money." This is financial dishonesty and it is disgraceful that the Government should condone it.
I hope that the Government will say tonight that, whilst this scheme is going on, the I.R.C. will not offer any loans of any sort to British industry because this is trying to loan back to British industry British industry's own money.
I hope that I have made the case, which I believe to be very powerful, that the liquidity of companies is now being affected to such an extent that it is not a debating matter any longer. Management and executive meetings throughout the country are cutting research and development plans. One way the Government can help industry to expand in 1970 and 1971 is to withdraw this scheme immediately.

5.15 p.m.

Mr. Taverne: When the Customs (Import Deposits) Act was being debated last year, there was a certain amount of schizophrenia among hon. Members opposite. Some of them appeared to be protectionist and others free traders. For different reasons, there has again been a fundamental contradiction in their arguments today. One has contradicted another and, to some extent, the hon. Member for Barkston Ash (Mr. Alison) contradicted himself.
The hon. Gentleman made two main points. First, he said that the scheme had had no effect on non-exempt categories of goods. Secondly, he said that credit restraint had not been successful, that the scheme had not made credit more difficult to obtain, that, although there may be £400 million tied up at the moment in customs, with £300 million added in the June quarter, the liquidity of companies showed the fatuity of the Government's fiscal and monetary policies.
I have myself stressed the second factor, but everything the hon. Gentleman said was totally contradicted by other contributions made by his hon. Friends. The hon. Member for Acton (Mr. Kenneth Baker) has just complained of an appalling shortage of liquidity in companies which must be remedied by deposits being paid back. Yet the hon. Member for Barkston Ash says that the scheme has been a total failure and has not affected the liquidity of companies or credit restraint or made credit more difficult to obtain. The two hon. Gentlemen must argue between themselves as to which of them is right.

Mr. Alison: I will argue with the hon. and learned Gentleman because it is his arguments and not ours which are contradictory. The argument of my hon. Friend the Member for Acton (Mr. Kenneth Baker) is that companies end up by getting the money they want, but that it goes through so many different hands that they have to pay a good deal more for it. In other words, they get it at an inflated cost as a result of the extra middlemen.

Mr. Taverne: But that was not the argument which was advanced. The hon. Member for Barkston Ash advanced the case that the squeeze has not worked. The hon. Member for Acton argued that the squeeze is working too much. One cannot reconcile those two views.
Both the hon. Member for South Angus (Mr. Bruce-Gardyne) and the hon. Member for Barkston Ash made the point that it is possible, if we relax other aspects of Government policy, to offset the effect of the scheme. Of course it is. The scheme is not the sole means by which the expansion of credit is controlled, but only one of them. If we relaxed other restraints on credit, this


could obviously offset the effect of the scheme.
But, as my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) explained in a speech which was a complete answer to every point made on the benches opposite, this scheme is part of a package, and plays an important part in that package. It reinforces credit restraint and the question we have to consider is whether it is having a beneficial or harmful effect, which is what the hon. Member for Acton addressed himself to.

Mr. Kenneth Baker: I am glad that at last we have had from the Government a definition of what the package is intended to do. I understand now that the package is intended to restrain domestic credit. Why, then, is a Government agency going around offering substantial loans to British industry? This must be counter-productive and against the policy of the Government. The contradiction lies in Government policy. On the one hand, they are holding back the liquidity of companies, and on the other, sending the Chairman of the I.R.C. out scattering money on loan.

Mr. Taverne: I am sorry that the hon. Member for Acton does not understand either the effect of Government policy or the intention of Government policy. What is certainly achieved is restraint of consumption. Of course, this does not mean that the I.R.C. will not continue to play its extremely useful part in encouraging expansion in those sectors of industry which are vital to our balance of payments; this is something entirely separate. But there is certainly an effect on consumption, and there was intended to be an effect on consumption.
As I outlined at the very start of my speech on Second Reading, the first justification of the continuation of the import deposits scheme is that it is a contribution to the successful policy of credit restraint which has helped to produce the results which we have seen in recent months.
The hon. Member for Barkston Ash said that the scheme had no effect whatever on the import of goods in the non-exempt category. This was answered by some of his hon. Friends, but I was surprised to find that he answered it himself. He outlined the effects on

E.F.T.A. and said that E.F.T.A. had naturally expressed concern. He said, "No wonder E.F.T.A. expressed concern". He said that what had happened was that our imports from E.F.T.A. were now higher by only one third as compared with our exports to E.F.T.A. Yet he said that the scheme had had no effect whatever on imports. His hon. Friends said that E.F.T.A. was naturally showing concern because our exports to E.F.T.A. had expanded three times as fast as our imports from E.F.T.A.
The hon. Gentleman cannot have it both ways. Nor can he reconcile what he said with the view of his hon. Friend the Member for St. Ives (Mr. Nott), who said that the moment the scheme was ended we would see a great surge of imports, imports flowing in in masses.

Mr. Nott: indicated dissent.

Mr. Taverne: I am exaggerating a bit, but the hon. Member for Barkston Ash must allow me some dramatic effect when there is such an obvious and plain contradiction between everything he said and what his hon. Friends said.

Mr. Chapman: What the hon. Member for St. Ives (Mr. Nott) said was that nobody denied that the scheme had had an effect on reducing imports in the short term. Those were almost his exact words.

Mr. Taverne: I must quote him. He said that if the scheme were ended, imports would be sucked in. Those were his words and I took them down verbatim. If imports are to be sucked in when the scheme is ended, that implies that while the scheme is on, it prevents those imports from coming in. But that is a contradiction of what was said by the hon. Member for Barkston Ash.

Mr. Alison: The hon. and learned Gentleman is having fun with his vast exaggerations. The figures which he has quoted back at me in no way invalidate my argument. They show simply that exports from E.F.T.A. have risen substantially, but that E.F.T.A.'s imports from us have gone up even more and that there is, therefore, a built-in incentive for E.F.T.A. countries to see whether they cannot at any rate try a system of import deposits as the British Government have said that it has such a powerful effect.

Mr. Taverne: That is not the way in which the hon. Gentleman put it. He said that the E.F.T.A. countries were right to show concern because the scheme had had an adverse effect on their trade with us.
Let us consider the figures. I have said from the start that it is very difficult to isolate the particular effect of import deposits, and I am sure that hon. Members will recognise this, when it is part of a package of measures including, first, the delayed action effect of devaluation, secondly, the effect of the credit squeeze as a whole, thirdly, the effect of fiscal measures on the restraint of consumption itself, which has also had an effect on imports, and, fourthly, the import deposits scheme. When there are at least four different factors involved, it is clearly impossible to say that one of those factors accounts for £20 million, £40 million or £80 million worth of a reduction of imports.
The only fair test, and I challenge any hon. Member opposite to give me a fairer lest, is to say—and I repeat that it is difficult to isolate an individual influence—that there have been certain factors working on all imports while the import deposit scheme has worked on only some, so if we compare the rate of increase of imports of those goods which are exempt with the rate of increase of imports of goods subject to the scheme, we shall arrive at some sort of effect. I can see no other way of doing it.
I put these figures before the Committee very fairly. I do not claim that any figures which one may mention will show an exact influence and hon. Members must draw their own conclusions. However, the figures are not as the hon. Member for Barkston Ash described them, when he said that the difference was as though a boy described himself as being over 11 while another said that he was under 12.
Before the scheme was imposed, the annual rate of increase of goods covered was more than 13 per cent. and the annual rate for goods not covered was less than 5 per cent. I have described that quite accurately as a rate of nearly three times as much for the former. Since the import deposits scheme has been introduced, that rate has become just over twice, 6½ per cent. compared with 3 per

cent. That is the only kind of independent test which I can think of, and it suggests that there has been a useful and considerable effect.

Mr. Alison: The hon. and learned Gentleman has not answered the point which we have been making, which is that the drop in this imbalance should have been very much greater, if his theory is right, taking into account the substantial drop in the rate of growth between the two periods.

Mr. Taverne: The hon. Gentleman has not followed the argument. First, he has totally understated the rate of growth and, secondly, he has not grasped the fact that if there are certain measures working on all imports, one must look to the distinguishing factors which are working selectively only on imports subject to the scheme. That is the test and the distinction which one must draw. Looking at the total effect of the measures, to which this is a contribution, that is what one would find.
One does not find, as the hon. Member for St. Ives suggested, a small surplus. He mentioned £66 million in the last quarter. He left out completely what must be current figures and he left out invisibles. Hon. Members opposite are always rightly stressing the enormous importance of invisibles to our balance of trade. Counting invisibles at the rate of £40 million a month, the picture is not one in which there is a small surplus. Counting the last three months' invisibles, we have been running at the rate of about £500 million a year in current surplus. It is perfectly true that one does not want to be dogmatic about progress in future and that is one of the reasons we are keeping the scheme on—because we are cautious. We do not want to make over-dramatic claims for the future.

Mr. Nott: You want to win the election.

Mr. Taverne: The hon. Gentleman is obsessed with party politics. He does not for a moment consider reports outside Britain. I will take not a Treasury forecast, but the forecast of O.E.C.D. for 1970. O.E.C.D. is not concerned with winning an election. It is looking at 1970 as a whole and considering the effect on the balance of payments of the current measures. I am not saying


whether it is wrong, but citing an objective judgment. O.E.C.D. says that it foresees for the United Kingdom in 1970 a balance of payments surplus on current account of some £600 million.

Mr. Nott: About time, too.

Mr. Taverne: But some of the hon. Member's hon. Friends were saying that the Chancellor of the Exchequer was now obsessed with the need to have a surplus. We have been perfectly consistent all along and have said that we want to obtain a strong balance of payments surplus for a long and continuing period. There is a packet of policies directed to obtaining that surplus and at the moment those policies look likely to succeed.
The arguments on the Amendment have been exactly the arguments which were used on Second Reading. As my hon. Friend the Member for The Hartlepools (Mr. Leadbitter) said, nothing new has been said. What we are saying is that the import deposits scheme is part of a package which is working; let us not unwrap the package now.

Mr. Terence L. Higgins: I am sorry that the Financial Secretary seems to have inherited his predecessor's frivolous approach to some of these arguments. I found his arguments almost as difficult to follow as those of the hon. Member for Birmingham, Northfield (Mr. Chapman). It is not true that anyone on this side of the Committee has ever suggested that it was easy to manage the economy. That is not an accusation which may reasonably be levelled at the Opposition. On the other hand, there is no doubt that all the main economic indicators make it abundantly clear that in an equally difficult situation we managed it better than hon. Members opposite are suggesting.

[Sir BARNETT JANNER in the Chair]

5.30 p.m.

This was brought out very clearly by my hon. Friend the Member for St. Ives (Mr. Nott) who quoted the relevant statistics with regard to unemployment, economic growth, inflation and so on. It is not a simple problem and it is clear that we need to look at this in as sophisticated a manner as possible. Some

of the questions were simple and we might have expected that we would have received reasonably straightforward answers from the Financial Secretary.

We want an answer why the Government have changed their mind. The Chancellor said quite clearly the other day that he is now on his most optimistic target figure. If that is so, why do we now have this Bill before us, when it was abundantly clear that he did not intend the scheme to run for more than a year? Secondly, we need to examine the whole question of the reserves, but perhaps that would be more appropriate on Third Reading.

I am deeply worried by the approach of a number of hon. Gentlemen opposite on Second Reading—and again today by the hon. Member for Northfield—and also by the disregard that they show for our international obligations and the need to encourage greater freedom of trade. On that point I am surprised that the Financial Secretary did not disown the suggestion that this kind of measure might become a permanent part of our economic armoury. It would be very dangerous if that point of view were to spread among our E.F.T.A. partners.

Regardless of what has been said by hon. Members opposite, the fact is that our E.F.T.A. partners are very worried about the effect that this measure is having. They are worried that it is slowing down the rate of growth which would otherwise have taken place in the imports and exports between the various E.F.T.A. countries. For that reason, I hope that my hon. and right hon. Friends will join me in voting in favour of the Amendment.

Mr. Chapman: The point that the hon. Member does not seem to realise when he talks about our foreign competitors and our friends in Europe is that they too want to experiment with more sophisticated weapons in controlling the balance of payments problem. All the countries in Europe are not prepared to have "stop-go" cycles that amount to recessions and drastic cuts in international trade through the old measures. They are all preferring one by one to grope forward with these more sophisticated weapons.

Mr. Higgins: The implication of what the hon. Gentleman has said must mean that these so-called more sophisticated measures are measures which will inevitably lead to a restraint on trade between countries. They will inevitably reduce the total of world trade. There is no country which has more to lose from this kind of policy than the United Kingdom. We therefore believe it is right and proper, while we are against the scheme as a whole, and this will be made even more clear later, that some limitation of the kind which this Amendment imposes is the right approach.
I return to the quotation of the Chancellor of the Exchequer. When he first mentioned his scheme in the House he said quite clearly:

Imports will be reduced directly because of the difficulty and cost of obtaining credit."—[OFFICIAL REPORT, 22nd November, 1968; Vol. 773, c. 1795.]
That has not proved to be so. We are still without any explanation why the Government should extend this scheme. We believe that it should be limited in the way suggested by the Amendment, or better still, should not be carried forward at all. We shall continue to press that view and I hope my hon. and right hon. Friends will join me in the Division Lobby and vote for the Amendment.

Question put, That the Amendment be made: —

The Committee divided: Ayes 160, Noes 200.

Division No. 12.]
AYES
[5.35 p.m.


Alison, Michael (Barkston Ash)
Grant-Ferris, Sir Robert
Page, Graham (Crosby)


Allason, James (Hemel Hempstead)
Griffiths, Eldon (Bury St. Edmunds)
Page, John (Harrow, W.)


Baker, W. H. K. (Banff)
Gurden, Harold
Pardoe, John


Balniel, Lord
Hall-Davis, A. G. F.
Peel, John


Bell, Ronald
Hamilton, Michael (Salisbury)
Percival, Ian


Bennett, Sir Frederic (Torquay)
Harrison, Col. Sir Harwood (Eye)
Pike, Miss Mervyn


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Harvey, Sir Arthur Vere
Pounder, Rafton


Berry, Hn. Anthony
Harvie Anderson, Miss
Price, David (Eastleigh)


Bessell, Peter
Hastings, Stephen
Prior, J. M. L.


Birch, Rt. Hn. Nigel
Hawkins, Paul
Pym, Francis


Boardman, Tom (Leicester, S.W.)
Heald, Rt. Hn. Sir Lionel
Ramsden, Rt. Hn. James


Body, Richard
Heath, Rt. Hn. Edward
Rhys Williams, Sir Brandon


Boyd-Carpenter, Rt. Hn. John
Higgins, Terence L.
Rossi, Hugh (Hornsey)


Boyle, Rt. Hn. Sir Edward
Hirst, Geoffrey
Russell, Sir Ronald


Brewis, John
Hogg, Rt. Hn. Quintin
St. John-Stevas, Norman


Brornley-Davenport, Lt. -Col. Sir Walter
Holland, Philip
Scott-Hopkins, James


Brown, Sir Edward (Bath)
Hornby, Richard
Shaw, Michael (Sc'b'gh &amp; Whitby)


Bruce-Gardyne, J.
Hunt, John
Silvester, Frederick


Buchanan-Smith, Alick (Angus, N &amp; M)
Jenkin, Patrick (Woodford)
Sinclair, Sir George


Bullus, Sir Eric
Jennings, J. C. (Burton)
Smith, Dudley (W'wick &amp; L'mington)


Campbell, IS. (Oldham, W.)
Johnston, Russell (Inverness)
Smith, John (London &amp; W'minster)


Campbell, Gordon (Moray &amp; Nairn)
Kaberry, Sir Donald
Stainton, Keith


Carlisle, Mark
King, Evelyn (Dorset, S.)
Stoddart-Scott, Col. Sir M.


Cary, Sir Robert
Kitson, Timothy
Summers, Sir Spencer


Channon, H. P. G.
Lancaster, Col. C. G.
Tapsell, Peter


Chataway, Christopher
Lane, David
Taylor, Sir Charles (Eastbourne)


Clegg, Walter
Lawler, Wallace
Taylor, Frank (Moss Side)


Cooke, Robert
Legge-Bourke, Sir Harry
Thatcher, Mrs. Margaret


Cordle, John
Lloyd, Ian (P'tsm'th, Langstone)
Thorpe, Rt. Hn. Jeremy


Corfield, F. V.
Lubbock, Eric
Turton, Rt. Hn. R. H.


Costain, A. P.
McAdden, Sir Stephen
van Straubenzee, W. R.


Craddock, Sir Beresford (Spelthorne)
MacArthur, Ian
Vaughan-Morgan, Rt. Hn. Sir John


Crowder, F. P.
Mackenzie, Alasdair(Ross &amp; Crom'ty)
Vickers, Dame Joan


Cunningham, Sir Knox
Maclean, Sir Fitzroy
Waddington, David


Currie, G. B. H.
Macleod, Rt. Hn. Iain
Wainwright, Richard (Colne Valley)


Dalkeith, Earl of
McMaster, Stanley
Walker, Peter (Worcester)


Dance, James
McNair-Wilson, Michael
Walker-Smith, Rt. Hn. Sir Derek


Dean, Paul
Maginnis, John E.
Walters, Dennis


Deedes, Rt. Hn. W. P. (Ashford)
Marples, Rt. Hn. Ernest
Ward, Christopher (Swindon)


Dodds-Parker, Douglas
Marten, Neil
Ward, Dame Irene


Drayson, G. B.
Maudling, Rt. Hn. Reginald
Weatherill, Bernard


Eden, Sir John
Maxwell-Hyslop, R. J.
Wells, John (Maidstone)


Elliot, Capt. Walter (Carshalton)
Maydon, Lt.-Cmdr. S. L. C.
Whitelaw, Rt. Hn. William


Eyre, Reginald
Mills, Stratton (Belfast, N.)
Wiggin, A. W.


Farr, John
Mitchell, David (Basingstoke)
Williams, Donald (Dudley)


Fisher, Nigel
Monro, Hector
Wolrige-Gordon, Patrick


Fletcher-Cooke, Charles
Montgomery, Fergus
Wood, Rt. Hn. Richard


Fortescue, Tim
More, Jasper
Worsley, Marcus


Foster, Sir John
Munro-Lucas-Tooth, Sir Hugh
Wright, Esmond


Gilmour, Ian (Norfolk, C.)
Nabarro, Sir Gerald
Wylie, N. R.


Glover, Sir Douglas
Neave, Airey



Godber, Rt. Hn. J. B.
Nicholls, Sir Harmar
TELLERS FOR THE AYES:


Goodhart, Philip
Nott, John
Mr. Humphrey Atkins and


Gower, Raymond
Orr-Ewing, Sir Ian
Mr. Anthony Royle.


Grant, Anthony
Osborn, John (Hallam)





NOES


Albu, Austen
Grey, Charles (Durham)
Mikardo, Ian


Allaun, Frank (Salford, E.)
Griffiths, David (Rother Valley)
Millan, Bruce


Alldritt, Walter
Griffiths, Eddie (Brightside)
Miller, Dr. M. S.


Armstrong, Ernest
Hamilton, James (Bothwell)
Milne, Edward (Blyth)


Atkins, Ronald (Preston, N.)
Hamilton, William (Fife, W.)
Mitchell, R. C. (S'th'pton, Test)


Atkinson, Norman (Tottenham)
Hamling, William
Molloy, William


Bacon, Rt. Hn. Alice
Hannan, William
Morris, Alfred (Wythenshawe)


Baxter, William
Harper, Joseph
Morris, Charles R. (Openshaw)


Beaney, Alan
Harrison, Walter (Wakefield)
Moyle, Roland


Bence, Cyril
Haseldine, Norman
Neal, Harold


Bennett, James (G'gow, Bridgeton)
Hattersley, Roy
Newens, Stan


Binns, John
Hazell, Bert
Norwood, Christopher


Blackburn, F.
Henig, Stanley
Oakes, Gordon


Blenkinsop, Arthur
Herbison, Rt. Hn. Margaret
O'Halloran, Michael


Boardman, H. (Leigh)
Hilton, W. S.
Orbach, Maurice


Booth, Albert
Hooley, Frank
Oswald, Thomas


Boston, Terence
Horner, John
Owen, Will (Morpeth)


Bottomley, Rt. Hn. Arthur
Howell, Denis (Small Heath)
Padley, Walter


Boyden, James
Howie, W.
Page, Derek (King's Lynn)


Bradley, Tom
Hoy, Rt. Hn. James
Pannell, Rt. Hn. Charles


Brooks, Edwin
Hughes, Roy (Newport)
Park, Trevor


Broughton Sir Alfred
Hunter, Adam
Parker, John (Dagenham)




Pavitt, Laurence


Brown, Hugh D. (G'gow, Provan)
Hynd, John
Pearson, Arthur (Pontypridd)


Brown, R. W. (Shoreditch &amp; F'bury)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pentland, Norman


Buchanan, Richard (G'gow, Sp'burn)
Jeger, George (Goole)
Perry, Ernest G. (Battersea, S.)


Butler, Herbert (Hackney, C.)
Jenkins, Hugh (Putney)
Perry, George H. (Nottingham, s.)


Butler, Mrs. Joyce (Wood Green)
Jenkins, Rt. Hn. Roy (Stechford)
Probert, Arthur


Callaghan, Rt. Hn. James
Johnson, Carol (Lewisham, S.)
Randall, Harry


Cant, R. B.
Johnson, James (K'ston-on-Hull, W.)
Rankin, John


Carter-Jones, Lewis
Jones, Dan (Burnley)
Richard, Ivor


Chapman, Donald
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Roberts, Albert (Normanton)


Coleman, Donald
Jones, J. Idwal (Wrexham)
Roberts, Rt. Hn. Goronwy


Concannon, J. D.
Jones, T. Alec (Rhondda, West)
Roberts, Gwilym (Bedfordshire, S.)


Conlan, Bernard
Judd, Frank
Robertson, John (Paisley)


Dalyell, Tam
Kelley, Richard
Rodgers, William (Stockton)


Darling, Rt. Hn. George
Kerr, Russell (Feltham)
Ross, Rt. Hn. William


Davies, G. Elfed (Rhondda, E.)
Lawson, George
Ryan, John


Davies, Rt. Hn. Harold (Leek)
Leadbitter, Ted
Shaw, Arnold (Ilford, S.)


Davies, S. O. (Merthyr)
Lee, Rt. Hn. Frederick (Newton)
Silverman, Julius


Dempsey, James
Lestor, Miss Joan
Skeffington, Arthur


Dewar, Donald
Lewis, Arthur (W. Ham, N.)
Slater, Joseph


Dickens, James
Lewis, Ron (Carlisle)
Small, William


Doig, Peter




Dunwoody Mrs. Gwyneth (Exeter)
Lipton, Marcus
Spriggs, Leslie


Dunwoody, Dr. John (F'th &amp; C'b'e)
Lomas, Kenneth
Strauss, Rt. Hn. G. R.


Eadie, Alex
Loughlin, Charles
Swain, Thomas


Edwards, Robert (Bilston)
Luard, Evan
Taverne, Dick


Edwards, William (Merioneth)
Lyon, Alexander W. (York)
Thomas, Rt. Hn. George


English, Michael
Lyons, Edward (Bradford, E.)
Tinn, James


Ennals, David
Mabon, Dr. J. Dickson
Tuck, Raphael


Ensor, David

Urwin, T. W.


Ensor, David
McBride, Neil
Varley, Eric G.


Evans, Fred (Caerphilly)
McCann, John
Watkins, David (Consett)


Evans, Ioan L. (Birm'h'm, Yardley)
MacColl, James
Watkins, Tudor (Brecon &amp; Radnor)


Faulds, Andrew
McElhone, Frank
Wellbeloved, James


Fernyhough, E.
McGuire, Michael
Wells, William (Walsall, N.)


Finch, Harold
Mackenzie, Gregor (Rutherglen)
White, Mrs. Eirene


Fletcher, Rt. Hn. Sir Eric (Islington, E.)
Mackie, John
Wilkins, W. A.


Fletcher, Ted (Darlington)
Mackintosh, John P.
Wiley, Rt. Hn. Frederick


Foot, Michael (Ebbw Vale)
Maclennan, Robert
Williams, Clifford (Abertillery)


Ford, Ben
McMillan, Tom (Glasgow, C.)
Willis, Rt. Hn. George


Forrester, John
McNamara, J. Kevin
Wilson, Rt. Hn. Harold (Huyton)


Fowler, Gerry
MacPherson, Malcolm
Winnick, David


Freeson, Reginald
Mahon, Simon (Bootle)
Woodburn, Rt. Hn. A.


Galpern, Sir Myer
Mallalieu, E. L. (Brigg)
Woof, Robert


Gardner, Tony
Mallalieu, J.P.W. (Huddersfield, E.)



Ginsburg, David
Mapp, Charles
TELLERS FOR THE NOES:


Golding, John
Marks, Kenneth
Mr. R. F. H. Dobson and


Gregory, Arnold
Mellish, Rt. Hn. Robert
Mr. Alan Fitch.

5.45 p.m.

Mr. Higgins: I beg to move Amendment No. 3, in page 1, line 21, leave out 'forty' and insert 'ten'.

The Temporary Chairman (Sir Barnett Janner): With this Amendment we shall discuss the following Amendments:

No. 2, page 1, line 20, after 'cent.', insert:
'of the value of the goods'.
No. 4, in page 1, line 21, leave out 'forty per cent.' and insert:
'at the following percentages of the value of the goods:

As from 5th December, 1969 to 4th February, 1970
40%

As from 5th February, 1970 to 4th April, 1970
30%


As from 5th April, 1970 to 4th June, 1970
20%


As from 5th June, 1970 to 4th December, 1970
10%"

Mr. Higgins: The purpose of the Amendment is to reduce the rate of import deposits from 40 per cent. to 10 per cent. Just as we have had no explanation from the Government why the Bill has been introduced for one year in contrast to their original statements, so we have had no explanation why they have fixed the rate at 40 per cent. This afternoon we had an extraordinary spectacle when the President of the Board of Trade was answering Questions. My hon. Friend the Member for Acton (Mr. Kenneth Baker), in Question No. 22, asked
the President of the Board of Trade by how much he estimates that imports will increase when the rate of import deposits is reduced from 50 to 40 per cent.
It became apparent that Ministers could give no estimate at all. Indeed, in subsequent exchanges it became apparent that the Board of Trade had not even attempted to estimate what the effect would be on the level of imports.
It is true that the figure will be substantially influenced by the fact that, because they believed what the Chancellor of the Exchequer said last year—that the Bill would come to an end at the end of the year—many people have held back from importing in recent months. Following the renewal of the scheme, if the Bill is approved, we shall probably see some bulge in imports. But the fact that there has been this anticipation of the end of the scheme, and then disappointment, inevitably clouds the facts of the case That is common ground.
Nevertheless, the Government should have made some estimate both of the extent of the anticipation and of the extent to which it will subsequently be counteracted, as well as some estimate of what the effects of various changes in the rates were likely to be. Various items, such as foodstuffs and raw materials, are exempt, but from what the Chancellor said it is clear that the duty is likely to affect the imports of goods which are subject to the import deposits scheme. That being so, surely some estimate should have been made of the demands for the various products subject

to the scheme and, consequently, how much a reduction of the rate from 50 per cent. to 40 per cent. was likely to affect the level of imports. As far as we have been able to establish, no such studies have even been attempted. Will the Minister of State tell us whether any such studies have been made and, if they have, will he indicate the effect which a change of this kind will have on the level of imports?
It seems to us that we ought to put down this Amendment, and I will explain why we have done so. Throughout last year and this year we have maintained that this scheme is objectionable in principle. That continues to be our view. An Amendment seeking to reduce the rate might in some ways be thought to condone the Government's action. That is not the case. We thought it right that the House should have an opportunity to examine the effect of a 40 per cent. rate against that of a somewhat lower rate in specific cases.
In many ways the Bill embodies the various approaches which the Government have adopted and which are objectionable in legislation. One of the most objectionable features, to which I have referred previously, is the way in which the Government draw Money Resolutions. They do so in such a way as to curtail debate on subjects which are legitimate subjects of discussion. There has been no other case in which the Money Resolution has been drawn as tightly as in this case. I referred to the point when we debated the Ways and Means Resolution on 10th November.
That Resolution stated that the original import deposits scheme
may remain in force, subject to the like exemptions and reliefs as were provided for
in the original Act. I stress
the like exemptions and reliefs
because businessmen and others do not, I think, understand the impact of a Money Resolution on the way in which Amendments can be framed. The beating of the Government on Money Resolutions and Amendments has been something that we have got into the habit of doing ever since the selective employment tax debates.
This, however, is quite the tightest Resolution that we have had. Without consulting experts on the subject, I was


unable to find any way in which to get Amendments in order on the Paper, and, therefore, debatable, concerning specific items which, in our view, should not be subject to the import deposits scheme.
I thought originally that the expression
the like exemptions and reliefs
might be interpreted as being "similar exceptions and reliefs" but, unfortunately, I understand that the legal approach is somewhat different and the alleged commonsense approach is that the word means, not similar, but the same.
That is difficult to understand. Whereas the Minister of State and I might be alike in the sense that we are both human beings, it would be a wrong use of syllogisms to suggest that we were the same human beings. That, however, is apparently how these matters work. As a result, it is only on an Amendment of the kind that I have moved that we can legitimately bring to the attention of the House of Commons and the Government specific cases which should be considered concerning the impact of the import deposits scheme.
The second point, which, again, is typical of the way in which the Government have approached various pieces of legislation of this kind in recent years, concerns the use of a classification, produced for a quite different purpose, as the basis for making exemptions concerning import deposits, S.E.T., and so on. This inevitably means that the classification is precise but quite inappropriate for the new use to which it has been put. As a result of this, a number of items are subject to the import deposits scheme which on any reckoning should clearly have been excluded.
The main exemptions which were mentioned last year, and which are still subject to the full rate of duty, are food and raw materials. The main problem concerning these two items arose in two ways. First, we found that a number of items which obviously should have been excluded, even on the definition of food and raw materials, were subject to the import deposits scheme because they were hidden somewhere in the midst of the complicated classification which the Government incorporated in the original Bill.
Last week, on Second Reading, there were two references to this in particular. One was by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey), who, at col. 910, referred to the use of calcium carbide and pointed out that this product was subject to the import deposits scheme even though it was entirely imported and there was no possibility of any import substitution scheme being evolved in the meantime. That inevitably meant that the effect on the importation of this item was nil and the effect on our industrial cost was quite considerable.
A similar point was made by the right hon. Member for Sheffield, Hillsborough (Mr. Darling). I am sorry not to see the right hon. Gentleman in his place, but it is abundantly clear why he is not to be seen. Although he put forward convincing arguments why, for example, silicon carbide should be excluded from the import deposits scheme because of its great importance to Sheffield in cutlery, hand tools, special steels and the abrasives industry, to which he referred at col. 906 on 17th November. Although, like my hon. Friend the Member for Macclesfield, the right hon. Gentleman would like to have seen the Bill amended, he was unable to do so—that, presumably, is why he is not here—because it was not possible to get Amendments within the rules of order. Clearly, however, there is a case for exempting those items.
The fact is that the Government have been too lazy to go into these matters and make the adjustments which, in the light of the last year's experience, they should have made. Meanwhile, however, the effect on our industrial costs has been contrary to the national interest and may positively mean that we do not sell exports as well as we otherwise would.
There is a specific point about which I wish to ask the Minister. When we debated the original Import Deposits Bill in Committee last year, the Government, perhaps persuaded by the arguments from this side or realising that they had made a mistake, put down a substantial Amendment with regard to the use of imported goods which were subsequently exported. The object, apparently, was to give discretion to enable goods which were imported and then used in exports to be exempted from the charge.
I should like the Minister to tell us to what extent that provision has been used during the last year and to what extent the deposits which have been paid have been refunded immediately rather than, probably, at the time when the goods were eventually exported, with the result that those who use these imported goods have borne the burden of the interest-free loan in the same way as anyone else. In view of the attention which the House gave this matter last year, I hope that the Minister can give us a clear answer. Those are the main points which I should like to raise in that context.
I want now to take by way of example three specific cases which I mentioned briefly in passing on Second Reading and to go into the matter in a little more detail. There appears to have emerged an absurd paradox in our institution arrangements concerning imports. The House will know that from time to time, for various reasons which have been specified in legislation and Statutory Instruments, the Board of Trade grants temporary exemptions from import duty. Usually, such proposals are put forward in the Board of Trade Journal and subsequently the Government take the necessary steps to ensure that exemptions are given for those items.
I want to take up one item in particular because it seems to be of interest. It is is referred to in the Board of Trade Journal of 29th October this year and it concerns cold reduced steel plates of iron and steel, rectangular, in coils of a width exceeding 500 mm. I understand that the Government have accepted that these items cannot be produced in this country in sufficient quantity to meet the demands of people here and, therefore, that they no longer impose the relevant duty, so that those who make household consumer durables, for example, can use the materials and not be subject to the additional cost of import duty.
As far as I can establish, however, those items and others like them, which are exempt temporarily from ifport duty, are still having to bear the import deposit. If that is so, it seems to me to be absurdly inconsistent. I may be wrong on this. It may be that the Government have already taken steps to ensure that that does not happen because, clearly, it is likely to inhibit the production of goods for export. I consider it to be

right to raise this matter and I hope that the Minister will undertake that if what I have said is correct and there is an inconsistency as against the position concerning temporary exemption from import duty, the same exemptions, of the same temporary nature, will be extended to the import deposits scheme.
6.0 p.m.
I turn now to my second example and this is the effect of the import deposits scheme on plywood. I mention this not so much as an item of the kind I was describing just now which has got lost somewhere in this vast industrial classification used for the scheme, but rather because the exemptions which were given last year only extend on the one hand to food and on the other hand to raw materials of semi-manufactured products defined in an arbitrary way by the Government. Those not exempt consequently bear the brunt of the import deposits scheme and these are another case, it seems to us, where one ought to reduce the rate of duty, or preferably, as we on this side have consistently argued, eliminate it altogether, because quite a number of these items—and I take plywood as an example—are effectually the raw materials which are used and of which there is no real domestic production which can hope to fill the gap.
Therefore, the effect of the import deposits scheme is to raise costs and to have no perceptible effect on imports. I understand that less than 4 per cent. of the country's total plywood requirement is actually produced domestically; the remaining 96 per cent. is imported. Therefore, I think it is quite clear that the net effect of putting the import deposits scheme on these items must be to raise our costs and not to have any perceptible effect on imports, though that is the declared objective of the Government's scheme.
If this is so the first point which one needs to notice is the very arbitrary way in which the thing is defined, because quite clearly it is a very fine line indeed to draw a distinction between plywood on the one hand and ordinary timber on the other, because these two are very close substitutes. Timber imported and used for packing cases is actually exempt, whereas plywood is not exempt. I find it difficult to find any possible rationale for


this. A number of items made of plywood—for example, packing cases, but of one kind and another—are used in exports. Therefore, the result must be to put up export costs and to have an adverse effect on our export performance. I do not suggest that this is an item which will affect the fundamental health of the British economy in a significant way such as the whole economic policy, but it is a fact none the less that the imposition of this scheme in this silly way does have an effect of discouraging exports and putting up the cost of living, rather than the reverse effect. Therefore, it is right and proper that we should look at this this afternoon and consider whether the Government ought to do something about this kind of case.
Similarly, with the export of motor cars, the export of completely knocked down components of motor cars, putting the import duty on plywood is likely to have an effect. It is true, of course, that it affects home building, home construction. So I hope that there again we shall have an explanation from the Minister about this item, which I take just as an example of one of the things which really cannot be easily produced in this country and where expansion of production is very difficult and clearly would not be worth while if the scheme is to go on for two or three years, let alone only for the forthcoming year.
The third example which I ought to take is the imports of paper and paper board. This, again, is an item in the packaging industry. I am not sure that this is one on which I can reasonably speak with expertise, but certainly in the packaging industry we have to import an enormous amount of various kinds of paper and these, again, are subject to import duty, cannot be readily produced in this country, and which may enter into exports. As I have said, I do not believe that the exemptions given last year for imports of raw materials for manufactures which go into exports have been effective. The arbitrary way in which the distinction is made is very odd indeed. Presumably, paper is reckoned a semi-manufacture and is subject to import duty, but if one imported paper pulp, as I understand it, this would be exempt. Yet presumably pulp is every bit as much a manufacture in its way. The difference

is between trees and pulp and between pulp and paper. Yet the line is drawn by the Government in this arbitrary way and in a way which is clearly working against the objectives of the Government's policy and the Government's Bill and seems to us to be a very silly way of going about it.
As I say, the only conclusion one can really reach from the way the Government have drawn the Money Resolution and the way they have put forward this Bill is that we must go through these items item by item, to see which sort should be excluded in the light of experience.
I come finally to the question of importers. I dealt at some length with this on Second Reading and I shall not now refer to it at great length, but the fact is that importers are carrying out a useful function in this country, although there was some antagonism towards them from the other side on Second Reading. It seems to us that the effect on importers is likely to result in a number of them going out of business even though they are performing a perfectly reasonable function. This is another example of the penny slot machines which we debated on the Finance Bill. This is another example of the way the Government go in for annihilation taxes. Measures of this kind which the Government impose and which put people out of business ought not to be taken as something we normally accept.
So, for all these reasons, I think the Committee should accept this Amendment. As I say, this in no way reduces out total antagonism to the Bill as such, but it seems to me that if we examine just the few examples which I have quoted it is enough to show that for a number of these at any rate the rate ought to be reduced. We would hope that for quite a number it should be eliminated altogether, but, failing that, the rate should be reduced on those items which quite clearly ought not to be in cluded in the scope of the Bill.

Mr. Cyril Bence: I would agree with the hon. Gentleman the Member for Worthing (Mr. Higgins) on the point about the packaging industry. The industry in this country, and, indeed, in every country of the world, is one of the great growth industries of the modern age Housewives


everywhere are demanding and getting domestic products of all kinds packaged in all sorts of ways very attractive to them. Packaging is a great selling property of a product, but it is becoming a very costly one. It is the same, as the hon. Gentleman mentioned, with the export of motor cars and what is called C.K.D.—completely knocked down. A great deal of component parts under C.K.D. are packed in corrugated paper and fibre board.
Much of this is not manufactured in this country. It is quite uneconomic to import pulp and convert it to paper rather than have it converted to paper in the timber-growing countries. Paper is an essential raw material in the whole packaging industry, and packaging enters into 90 per cent. of exports. There are several firms in this country making packaging and although packaging cannot be called an export product other people buy it from these firms, to pack the things which they export.
The import deposits scheme is driving up their cost. The cost of packaging some products is as high as that of the products inside the packages. We are trying to keep down the price of the product, but we are pushing up the price of the package in which product is put. If we could find a substitute for imported paper for making packages I would not be asking my hon. Friend to examine this matter. I can enumerate a whole string of products where the same argument applies. I have not been through such a string of products, but I do happen to know about these two, corrugated paper and paper packaging.
The motor industry is compelled to export C.K.D. because many importing firms are demanding that a proportion of products from the importing country shall be included in the assembled motor car. Nothing should be allowed to increase the cost of packaging and so increase the cost of exporting the product.
I recognise that, by eliminating one anomaly, another might be created, but I ask my hon. Friend to see whether it is possible to get over the anomalies. The hon. Member for Worthing has a very serious point in trying to deal with paper and plywood, the raw materials of packaging.

Mr. Tom Boardman (Leicester, Southwest): The hon. Member for Dunbartonshire, East (Mr. Bence) is right in supporting the criticisms made by my hon. Friend the Member for Worthing (Mr. Higgins) of the effect of the Bill. No doubt there might be some anomalies, but I believe that they are capable of being overcome.
In the pessimistic belief that Amendment No. 3 might not be accepted by the Government, I have tabled an Amendment in a different form, the effect of which would be a phasing out of the import deposits scheme, and I have endeavoured to meet all the reasons given by the Financial Secretary on Second Reading for the retention of the scheme. The purpose of Amendment No. 4 is to phase out import deposits over a period, the main taper coming within the first six months, leaving 10 per cent. for the remainder of the year.
The Financial Secretary has told us why he cannot do away altogether with the scheme, and I would be out of order if I were to reopen that debate, but the reasons he gave are material to the Amendment. The Financial Secretary, on Second Reading, promised that this time the deposit scheme will be temporary. The Paymaster-General last time said that they would be temporary and this has been repeated from time to time, but I am prepared for the purpose of this debate to give the Government the benefit of our accumulated doubts.
The Financial Secretary gave three reasons for renewing the import deposits, all of which are relevant to the Amendment. The first was that it was necessary to control credit expansion. He said that it was a useful incentive to companies to get their hands on moneys earned by exports. I believe that exactly the reverse effect has occurred.
Those of us who have from time to time been intimately involved in exports and export finance know that it is usually a slow process to get one's hands on money from the export market. There are, of course, facilities for export credit, but the delay between getting in the raw material and receiving the cash on a sale to the export market is much greater than with sales to the home market, and the first leg of his argument is, therefore, complete nonsense.
The second reason given by the Financial Secretary under the main heading of controlling credit expansion was that the continuation of the squeeze would do no more harm than good. That, at best, is a neutral term. He coupled that with a denial that there would be any surge of bankruptcies or liquidations. I ask the Minister of State to reflect on that, and on the trends which are becoming increasingly apparent to those closely involved with industry who know that many small companies are faced with great cash problems. I only hope that the Financial Secretary is right in his optimism that there will not be a spate o. bankruptcies and liquidations, but the signs are that the trend is there.
6.15 p.m.
The Financial Secretary accepted that the import deposits scheme slowed down industrial investment. Hon. and right hon. Members who either heard or have read what my hon. Friend the Member for Harwich (Mr. Ridsdale) said in the Adjournment debate on Friday will know about the rate of our industrial investment compared with that of competing countries such as Japan and Germany, and will recognise how relevant is this point to the Amendment.
Amendment No. 4 produces a gradual easing of the control and prevents the flood of money back, yet it permits investment plans to be made. If the Amendment were accepted, industry would know that each month it would be getting back a bit more of its money, that after six months it would receive back all bar 10 per cent. and that eventually it would receive it all.
The second argument put forward by the Financial Secretary on Second Reading was that it was necessary to avoid the monthly outflow of reserves over the next six months and to phase out the payments more gradually. The Amendment does just that. It drops the rate of import deposits by 10 per cent. each two months for the next six months and then retains, albeit reluctantly, the minimum deterrent of 10 per cent. for the final six months. This precisely meets the fear of the Financial Secretary that cutting off the import deposits would mean a flood of money back at a time when the country could not stand it.
The third point made by the Financial Secretary about which I wish to make

some criticism is that the scheme had a useful direct effect on imports. The figures given by the Financial Secretary were not very fairly stated. In referring to the comparison between the rate of growth of exempt and non-exempt imports as a justification for the import deposit scheme having had effect, he quoted figures, and then came to the conclusion that the difference between the rate of increase in non-exempt and exempt goods had dropped from nearly three times to just over twice.
Criticism has been made in an earlier debate today of those figures and they are misleading. The change, as near as I can calculate it, is about one-thirteenth. That is a distortion of the figure. I accept that the Financial Secretary's arithmetic may not be very good, but the figures were given on 17th November and the same argument has been repeated today.
The Financial Secretary in reply on another issue to my hon. Friend the Member for St. Ives (Mr. Nott) said that he had exaggerated a bit. I am sure that it was accepted as a lighthearted remark, but the Financial Secretary cannot bandy figures about on such a vital matter and either exaggerate a bit or produce a comparison which appears to give a different picture from that disclosed by an arithmetical analysis of the figure.

The Minister of State, Treasury (Mr. William Rodgers): I am sure that the hon. Gentleman would not wish to mislead the Committee about what my hon. and learned Friend said. Will he not agree that the figures were given fully in HANSARD on 17th November and are there for everybody to see? Therefore, the Financial Secretary has in no way sought to mislead anybody. I hope that the hon. Gentleman is not suggesting that the figures which appear in c. 878 are inaccurate.

Mr. Boardman: The figures themselves are not inaccurate. I was referring to the way in which they were presented as a justification for the effect of the import deposits scheme. To say that it had resulted in a difference between the rate of increase in non-exempted and that for exempted goods amounting to a drop of from three times to just over twice presents a picture—I accept it may not be


intentional—which does not bear mathematical examination since on my calculations the difference is about one-thirteenth.
I am glad to see the Financial Secretary now back in the Committee since I would not like to have made my criticisms in his absence. I regret that he was not able to be here when I was making my comments on his presentation of the figures.
A distortion of the figures does not help the argument. The hon. and learned Gentleman accepted that there were many differences in other respects to account for the trend. He justified his argument by saying that he took the only comparison which ignored all the other factors and which was common both to exempted and non-exempted goods. This is not in fact the case. The effect of devaluation was not constant, neither was the effect of world prices.
Exempted goods are largely concerned with foodstuffs and the like, whereas non-exempted goods are mainly industrial products. The pattern of price movement between them has been very different. The Financial Secretary will be aware that the rate of growth of the G.N.P. between the two periods showed a drop of 25 per cent. Its effect would be mainly on non-exempted goods. Marginally, the difference presented by his arithmetical calculation could be accounted for by a large variety of factors which have nothing to do with the import deposits scheme.
The argument against the Amendment that the scheme could not be dropped because it would increase the money coming back into the economy will be valid on any future occasion, if this Government are then in office. I therefore urge them to consider the Amendment which provides for a tapering off, if they are not prepared to go the whole way with a substantial reduction in the import deposits scheme.
To a Government taxes are like drugs or cigarettes to an addict. They are always something which one will give up tomorrow. I fear that if we do not have a phasing out of the imports scheme, in the same way as a smoker may discipline himself to cut down by a quarter, then by half and then drop the habit altogether, then we shall find that at this

time next year, if we have the misfortune to be faced with the same Government, precisely the same arguments will be put forward.
If the encouraging balance of trade figures are maintained, and if the achievement is as the Government claim it to be, then they should now commit themselves to get rid of this heavy burden on industry. Industry has managed to carry this burden for a year at great cost both to investment and to its forward planning. Industry has carried it for long enough. I hope that it will not be required to do so for a further 12 months since it is entitled to know when it will begin to get back its money. And I would stress that it is industry's money.

[Mr. SYDNEY IRVING in the Chair]

Mr. John Page: The Government are lucky that the hon. Member for Accrington (Mr. Arthur Davidson) has not earlier than this afternoon had an opportunity to introduce his Private Member's Bill to regulate inertia selling. This Bill is a sophisticated example of inertia selling, on the same basis as the innocent housewife who is persuaded to fill in a form asking for a monthly magazine or encyclopaedia to be sent to her and, unless she takes the trouble to prevent it, it keeps on coming to her.
There was a row over this legislation last year on 3rd and 4th December, but the Bill went through. The present Bill, in a couple of quick new Clauses, provides for the scheme to be continued for a further 12 months. I support Amendment No. 3, and also what was said by the hon. Member for Leicester, Southwest (Mr. Tom Boardman) on his Amendment No. 2. However, I feel that Amendment No. 4, in which my name is joined with his, should be more attractive to the Government. It gives them a great opportunity to tail off the scheme so that people will not be embarrassed suddenly by the fact that the Government will live up to their promises and drop the scheme. Amendment No. 4 provides for a gradual tailing off, rather than a sudden moment of relaxation which might, the Government are afraid, have bad effects.
The Bill has almost come to be accepted as a fairly permanent part of our way of life. I wish to raise the point


of remissions which are allowed to exporters. There are serious doubts in the minds of many importers of goods who sell through one, two or three stages of processing to a manufacturer who ultimately may re-export.
This doubt is underlined by the serious fact that, as I was informed only this afternoon, the OFFICIAL REPORT containing the Second Reading debate on this Bill is still not available from the Stationery Office. I have not checked that fact myself, but I have been informed of it by the director of an important company who wished to inform himself of the detail of that debate.
Will the Minister confirm that if these Amendments are not accepted, and the scheme is extended for a further 12 months, there will be no change in the system of rebates on import deposits in respect of imports later re-exported as covered by Schedule 2 of the 1968 Act? Let me spell this out for the benefit of the Minister of State. At present, if a processer of goods, say, can inform the importer that he expects to include in export 20 per cent. of the imported materials, when there is a 50 per cent. deposit and, as it were, a global 20 per cent. export, a remission of 20 per cent. of that 50 per cent. deposit is allowed, which means that only a 40 per cent. deposit need be made by the original importer.
What will now be the position of that same company, assuming the same 20 per cent. export potentiality? Does the system remain the same? Two companies to which I have spoken have assumed that, as they were previously paying 20 per cent. of the 50 per cent., they will now pay 10 per cent. of the 40 per cent. I see that the Minister of State nods his head: I hope that this assumption is right. My own sums have led me to a rather different conclusion, but confirmation of what I have just said will be extremely helpful to the business community.
In passing, I should like the Minister of State to hand a bouquet to the staff of the Customs and Excise for the way in which they have operated this scheme. I have taken a little trouble to inquire how the system of returning deposits is going, and I have been told that the

returned deposit reaches the depositing company on the very day of the expiry of the six months' period, and sometimes even on the day before. That is an excellent performance. It is most helpful to depositors to be absolutely certain, when considering cash flow—and deposits may involve very large figures—that they will get their deposit back not later than the appropriate date.
I should like, as a second rose in the bouquet, to congratulate the Customs and Excise on the flexible manner in which local inspectors have assessed the export content of goods which are, perhaps, being processed by more than one manufacturer before they are ultimately exported, and have allowed the original importer a global remission on his initial deposit. At half-past Twelve on the morning of 4th December last year, the then Financial Secretary, discussing the then Bill, said that the extra staff and extra administration required by the Customs and Excise would be negligible; and the way in which the scheme has been operated so far confirms that view.
There is now evidence that the influence of Parkinson is entering into the attitude of the Customs and Excise. It was right that when the scheme started, the Customs and Excise staff should have been informed, "This is a temporary Measure. It will last for 12 months. Use a bit of rule of thumb, and give quick and sensible rulings on the remission of deposits." It was right, knowing that it was to last for only 12 months, the Department should not have bothered to go too deeply into the evidence required, and do too much paperwork. But evidence now brought before me shows that a lot more time, energy, paperwork and consideration are apparently being expended by the Customs and Excise and this, in turn, means a lot more paperwork by the companies involved.
I re-emphasise a point made by my hon. Friend the Member for Worthing. How much continuing consideration are the Government, the Board of Trade and the Treasury giving to adding to the exemptions list goods not previously exempted but which surely now demand it? I have here a copy of the Board of Trade Journal of 29th October listing various types of tin plate and cold rolled steel


sheet. The leading explanatory paragraph states:
The Board of Trade are considering applications for the temporary exemption from import duty of materials listed below on the grounds that these materials are not made in this country or the Commonwealth, or the supply available from these sources is not substantial having regard to the existing United Kingdom demand.
In cases where the steel industry—

The Chairman: Order. Perhaps the hon. Member will explain how what he is saying is related to the rates under discussion. I find it difficult to follow him.

Mr. Page: I relate it to the fact that by my Amendment I would try to reduce the rates to 10 per cent. People now forced to import goods which previously could have been supplied in this country are very much inconvenienced if they have to put down a 40 per cent. deposit. If, however, it were a 10 per cent. deposit the inconvenience and expense to the company would be greatly reduced.
I also wished to make an en passant reference on behalf of an industry in which I have a personal interest, the synthetic rubber industry. I hope that on this Amendment consideration can be given to the removal from the list of imported synthetic rubber on the ground that—

The Chairman: Order. I have no doubt that now the hon. Member is out of Order.

Mr. Page: I was about to finish my sentence by saying that reclaimed synthetic rubber is already exempt and that this seems to be an anomaly.
I hope that if the Government cannot go all the way with Worthing they will at least go with Leicester and Harrow and make a sensible phasing out of the present scheme.

Mr. William Rodgers: It is very unlikely that I shall be able to go with Leicester and Harrow in this respect or with all the hon. Members opposite who have spoken in this debate.
The hon. Member for Worthing (Mr. Higgins) started by emphasising one of the contradictions which we have again seen this afternoon when he predicted some bulge in exports when the scheme eventually came to an end, whereas his hon. Friend the Member for Barkston

Ash (Mr. Alison) spoke of counter-productive effects of the scheme, by which we understood that it was likely that imports had been increased over the period in which it operated rather than been reduced. He went on to complain about the Money Resolution and got on to the substantive points.

Mr. Higgins: There is absolutely no contradiction here. Clearly, the effect of the scheme may be this or that over a year, but just before the scheme is expected to end action might be taken in anticipation of that happening and there might be a second effect when that turns out to be wrong.

6.45 p.m.

Mr. Rodgers: I found the hon. Member unconvincing. The suggestion that the scheme has been an impetus to the growth of imports and that there will be a further impetus when the scheme comes to an end might be right, but it is unconvincing. The hon. Member spoke of the effect of re-exports and the case for exemption of a number of commodities on varying grounds.
I was grateful to the hon. Member for Harrow, West (Mr. John Page) for congratulating the Customs and Excise on the flexible way in which it has operated the scheme. The whole Committee will agree that, despite the misgivings a year ago and the reservations there still are about the principle or the rate that we are discussing, the scheme has worked well because of the efforts of Customs and Excise. I am sorry that the hon. Member now feels that there is some hardening of the arteries. That is not the intention. Once the Bill has been through the House, if there has been any change in mood the same first-class service will be available thereafter.
So far as I can, within the rules of order, I wish to reply to everything that has been said this afternoon about commodities which will be subject to the present level of deposits and about which it might be argued there ought to be exemptions. Of course, there are cases which can be made. In the past, we have very carefully considered representations, and we shall continue to do so. Inevitably, if more anomalies are not to be created we have to walk warily. If there were a large range of concessions,


the effect of the Bill would be substantially reduced. This may be the wish of some hon. Members, but, having decided what we think the scheme ought to be, it would make nonsense of it if that happened and the purpose would not be achieved.
When my right hon. Friend announced the continuation of the scheme he made clear both what we had achieved and what we thought we might expect from the reduced 40 per cent. He took the view, which we have restated in discussions on Second Reading, that the scheme had a useful effect in a number of different fields. I ask the hon. Member for Leicester, South-West (Mr. Tom Boardman) to look again at what my hon. and learned Friend the Financial Secretary said on Second Reading. He had no wish to mislead the House and I do not believe that the detailed figures do so. They show that there has been a change in the rate of growth between exempt and non-exempt goods. The conclusion we have drawn, although, of course, it is not possible to quantify it, is that the scheme has had some desirable effects in this direction as well as in others.
As the Chancellor said, it is his view that at present, while it is desirable to retain the scheme, it is possible to reduce the effect. That is why the figure of 40 per cent. was chosen.

Mr. Tom Boardman: I do not accuse the Financial Secretary of bad faith, but I think that the hon. Gentleman will agree that the amount was one-thirteenth and the Chancellor's advocacy presented it in a rather different light.

Mr. Rodgers: If the hon. Member thinks that, I cannot argue with him further. The figures should be looked at. If the scheme were as small as one-thirteenth, which I do not accept, this makes a significant difference given the overall needs of the occasion. We are not saying, and we did not say on Second Reading, that continuing the scheme would make a very large difference, but that in all the circumstances, despite the fact that the trend on balance of payments is in the right direction, retaining the scheme at the level of 40 per cent. is about right. That is our view and for

that reason I hope that the Committee will reject the Amendment.

Mr. John Page: Possibly the Minister was not able to give an off-the-cuff answer to my question about the exact percentages of rebate. Would he be kind enough to write to me later or in some other way publicise this so that it may be made available to the business community, which seriously needs this information?

Mr. Rodgers: I am sorry that I overlooked that point, which is a substantial and very fair one. The system remains the same. Whereas it was 20 per cent. and 50 per cent. it is now 20 per cent. and 40 per cent.

Mr. Higgins: We must press the Minister of State on points we made because they were perfectly in order and there is no reason why he could not give us a reply. It may be that my hon. Friend the Member for Barkston Ash (Mr. Alison) may wish to make more general comments on what the hon. Gentleman said as to the principle. We quoted some specific examples—calcium carbide, plywood and packaging materials, and a particular one of steel.
I asked whether, if a thing is exempt from import duty or is not exempt from import deposit, to what extent the provisions of last year's measure with regard to the position of imported goods which were subsequently exported had actually been employed by the Customs and Excise. I asked whether or not, if that were so, the import deposit had still to be paid by the people using those goods for exports and thereby making an interest-free loan to the Government.
On all of these points it is not unreasonable for the Committee to expect specific answers. It is unreasonable for the Minister to brush the case off in general terms. If there are any arguments as to why these items should not be exempted, other than the fact that the Government have tabled a very tight Money Resolution and are not prepared to take the trouble to examine the items on their merits, let the Minister state the arguments against doing so. He should not seek completely to avoid the issue.
Our point is that, on any understanding of what the scheme is supposed to be about, not to exempt these goods must be


contrary to the country's interests, because the scheme is not doing anything other than inhibiting exports rather than encouraging them. There are a number of specific examples which should be covered. There are a number of points of general principle on which the Minister should give answers.
Therefore, as we are in Commitee, I hope that the Minister will respond and will deal both with the points of principle and with the specific examples.

Mr. William Rodgers: I had thought that I had dealt with the points of general principle. This is not the time to argue the case for or against individual exemptions. I said that we had considered all representations and that we would do so in future, but bearing in mind the necessity of preserving a scheme which made sense and which had achieved its purpose it was not our view that the items mentioned today and mentioned on Second Reading were ones for which we could consider exemptions.
I do not think that it would be possible, least of all on this Amendment, to discuss in detail all the separate arguments for and against each of the exemptions which have been mentioned. I give the hon. Gentleman the assurance, if he wishes it again, that we retain in a sense an open mind, in that we are prepared to consider cases which are put to us and to weigh in the balance whether it is right and proper in the circumstances to make a further exemption.
The hon. Gentleman asked about the question of import duty. This is a separate matter. There would be further complications, and there would be dangers of our appearing to move into a protectionist position, if we related import deposits and goods which were exempt or non-exempt directly to the use of import duties. The hon. Gentleman asked also about the question of re-exports.

Mr. Higgins: If an import is exempted from import duty on the ground that it cannot be produced in Britain and is necessary for Britain, it is clearly a non-sense at the same time to impose an import deposit. The two things are clearly on the same footing. There is absolutely no reason why, if it is exempted in one case, it should not be exempted in the other.

Mr. Rodgers: As I said—I do not want to keep on repeating this—the Bill is not designed as a protective measure. It has a different purpose. If we had this parallel between the use of import duties and an import deposits scheme, there would be legitimate international objection to using the scheme in this way as a protectionist Measure.

Sir Harmar Nicholls: Sir Harmar Nicholls (Peterborough) rose—

Mr. Rodgers: As I am attempting to reply to what the hon. Member for Worthing (Mr. Higgins) asked me earlier, I think that I should have a further go at it before attempting to deal with the further questions of hon. Gentlemen.
The hon. Member for Worthing asked about the portion of goods exempted under the re-export provisions. It is 20 per cent. As the hon. Member for Harrow, West (Mr. John Page) had in mind, there is every evidence that the scheme has operated effectively and very fairly in this respect. I am not aware of any criticisms which it has not been possible to meet.

Sir Harmar Nicholls: The Minister of State said that the deposit scheme was not intended as a protection. Surely it was intended to discourage imports. If that was not the reason for its introduction, I should like to know what the reason was. Why is it desirable to discourage something which we cannot produce and which we want? It is silly and a waste of time to say that the scheme does not mean protection. The whole object of the scheme was to discourage. Does the Minister of State agree that what he is doing is discouraging the import of things that we need because we cannot produce them?

Several Hon. Members: Several Hon. Members rose—

The Chairman: I do not want to discourage discussion, but we are getting on to the principle of the Bill rather than speaking to the Amendment.

Sir Harmar Nicholls: Mr. Irving, in view of the statement made by the Minister, I think that I am entitled to an answer. I asked a question arising from the Minster's statement. If the Minister's statement was in order, my question is bound to be in order.

Mr. Rodgers: The hon. Gentleman has not listened to the discussion fully otherwise he would know, as he should know also from the debate on Second Reading, that there were three principal purposes for the Bill, as my hon. and learned Friend said. Even though one of them related to checking the growth of imports, it would still remain the case that the purpose, intention and result of the Bill in that respect would not be the same as a protective measure as it is normally understood.

Mr. Nott: Are we not talking about the opposite of a protective measure? My hon. Friend the Member for Worthing (Mr. Higgins) spoke about precisely the opposite. He asked: why remove the duty on nickel sulphate and certain steel products and leave the import deposit on? We are arguing the opposite of protective duties.

Mr. Rodgers: The hon. Gentleman has not fully grasped the sophistication of the argument. My argument was that, if goods were exempted because they were not subject to import duty, we should get into the position where non-exception involved protection.

Mr. Alison: We have received a very bitty and unsatisfactory answer from the Minister of State, who has made confusion worse confounded by his series of half answers and non-answers to the questions put by my hon. Friend the Member for Worthing (Mr. Higgins) and others of my hon. Friends. One of the most significant omissions was the non-answer to the request by my hon. Friend the Member for Worthing for the Minister to quantify, not in financial terms, because that is obvious, but in terms of effect, the result of reducing the rate of import deposits from 50 to 40 per cent. The Minister made no attempt to answer that.
For the Government to come to the Committee in the matter of import deposits, whose effect in any case is agreed to be highly marginal and perhaps absolutely imperceptible and undefinable, and propose a reduction by 10 per cent., a result which is entirely unquantifiable, is a piece of hollow window-dressing which amounts almost to the frivolous. It is meant to show people that the

Government are ready to show willing, even though the amount cannot be calculated and is imperceptible.
If the Government have a disposition towards reducing the rate at which import deposits are to be charged, they have got to accept a figure which makes some attempt to bite at this question and not put forward this little 10 per cent. reduction, which will have a totally imperceptible effect.
If the Government will not accept the full scale of the major Amendment, we must ask them to think seriously as an alternative about the graduated rate of reduction which my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) put forward and which is a logical proposal.
One of our great objections to the Bill in its present form is that when it was intended that it should run for only 12 months, the Government took the trouble in Committee to see whether they could make some modifications in the Bill, namely, the exemption of certain goods which were going to be affected by export. They at least took the trouble to write into the Bill some rational and logical exemptions. Since they are asking for a second wind of an equal length, why did they not bring forward a Bill so that we could isolate the imports which were inelastic and which were coming in in the same volume as before?

7.0 p.m.

The Chairman: The hon. Member is going wide of the Amendment. It may be that the debate has covered this field before, but it is wide of the Amendment.

Mr. Alison: The only way in which we can persuade the Government to make amends for the unsatisfactory way in which the Bill has been brought forward, without any attempt to write in some of the provisos which existed in the original Measure, is by proposing a reduction of the rate—

Mr. Taverne: Surely the hon. Gentleman appreciates that there are exactly the same provisos in the previous measure.

Mr. Alison: What I am suggesting is that the Bill should have had its Money Resolution drawn in such a way that it was possible to make amendments


parallel to the amendments which it was possible to make in the Act's first year of run. Obviously, as a result of 12 months' experience there are categories, such as the inelastic categories to which my hon. Friend the Member for Worthing has referred, which should have come up for reconsideration by way of exemption. Since the Bill has come to us in a way in which we cannot make the amendment, the only reasonable alternative is a reduction in the rate of duty on a scale

which might have some chance of effect—that is to say, from 40 per cent. to 10 per cent.

If the Government will not make such a reduction I can only ask my hon. Friends to divide in favour of the Amendment.

Question put, That the Amendment be made: —

The Committee divided: Ayes 128, Noes 183.

Division No. 13.]
AYES
[7.1 p.m.


Alison, Michael (Barkston Ash)
Hamilton, Michael (Salisbury)
Page, John (Harrow, W.)


Allason, James (Hemel Hempstead)
Harrison, Brian (Maldon)
Pardoe, John


Baker, W. H. K. (Banff)
Hastings, Stephen
Peel, John


Balniel, Lord
Hawkins, Paul
Percival, Ian


Bennett, dr. Reginald (Gos. &amp; Fhm)
Heald, Rt. Hn. Sir Lionel
Pike, Miss Mervyn


Bessell, Peter
Heseltine, Michael
Pounder, Rafton


Biffen, Jhon
Higgins, Terence L.
Prior, J. M. L.


Boardman Tom (Leicester, S.W.)
Hill, J. E. B.
Pym, Francis


Body, Richard
Hirst, Geoffrey
Ramsden, Rt. Hn. James


Boyd-Carpenter, Rt. Hn. John
Holland, Philip
Rees-Davies, W. R.


Boyle, Rt. Hn. Sir Edward
Hornby, Richard
Rhys Williams, Sir Brandon


Brown, Sir Edward (Bath)
Hunt, John
Rodgers, Sir John (Sevenoaks)


Bruce-Gardyne, J.
Jenkin, Patrick (Woodford)
Rossi, Hugh (Hornsey)


Buchanan-Smith, Alick (Angus, N &amp; M)
Jennings, J. C. (Burton)
Royle, Anthony


Bullus, Sir Eric
Johnston, Russell (Inverness)
Russell, Sir Ronald


Campbell, B. (Oldham, W.)
King, Evelyn (Dorset, S.)
St. John-Stevas, Norman


Campbell, Gordon (Moray &amp; Nairn)
Lancaster, Col. C. G.
Scott-Hopkins, James


Carlisle, Mark
Lane, David
Shaw, Michael (Sc'b'gh &amp; Whitby)


Cary, Sir Robert
Legge-Bourke, Sir Harry
Silvester, Frederick


Chataway, Christopher
Lubbock, Eric
Sinclair, Sir George


Clegg, Walter
McAdden, Sir Stephen
Smith, Dudley (W'wick &amp; L'mington)


Cooke, Robert
MacArthur, Ian
Smith, John (London &amp; W'minster)


Corfield, F. V.
Mackenzie, Alasdair (Ross &amp; Crom'ty)
Stainton, Keith


Costain, A. P.
Maclean, Sir Fitzroy
Stoddart-Scott, Col. Sir M.


Crowder, r. P.
Macleod, Rt. Hn. Iain
Summers, Sir Spencer


Cunningham, Sir Knox
McNair-Wilson, Michael
Taylor, Sir Charles (Eastbourne)


Currie, G. B. H.
Maddan, Martin
Taylor, Frank (Moss Side)


Dalkeith, Earl of
Maginnis, John E.
Tilney, John


Dance, James
Maxwell-Hyslop, R. J.
Waddington, David


Dean, Paul
Maydon, Lt.-Cmdr. S. L. C.
Walker, Peter (Worcester)


Dodds-Parker, Douglas
Mills, Stratton (Belfast, N.)
Walker-Smith, Rt. Hn. Sir Derek


Eden, Sir John
Miscampbell, Norman
Ward, Christopher (Swindon)


Elliot, Capt. Walter (Carshalton)
Mitchell, David (Basingstoke)
Ward, Dame Irene


Eyre, Reginald
Monro, Hector
Wells, John (Maidstone)


Farr, John
Montgomery, Fergus
Whitelaw, Rt. Hn. William


Fortescue, Tim
More, Jasper
Wiggin, A. W.


Glover, Sir Douglas
Mott-Radclyffe, Sir Charles
Williams, Donald (Dudley)


Goodj\hart, Philip
Munro-Lucas-Tooth, Sir Hugh
Wolrige-Gordon, Patrick


Gower, Raymond
Nabarro, Sir Gerald
Worsley, Marcus


Grant, Anthony
Neave, Airey
Wylie, N. R.


Grant-Ferris, Sir Robert
Nicholls, Sir Harmar



Griffiths, Eldon (Bury St. Edmunds)
Nott, John
TELLERS FOR THE AYES:


Gurden, Harold
Orr-Ewing, Sir Ian
Mr. Humphrey Atkins and


Hall-Davis, A. G. F.
Page, Graham (Crosby)
Mr. Timothy Kitson.




NOES


Albu, Austen
Boyden, James
Davies, Ednyfed Hudson (Conway)


Allaun, Frank (Salford, E.)
Bradley, Tom
Davies, G. Elfed (Rhondda, E.)


Armstrong Ernest
Broughton, Sir Alfred
Davies, Rt. Hn. Harold (Leek)


Atkinson, Norman (Tottenham)
Brown, Hugh D. (G'gow, Provan)
Davies, S. O. (Merthyr)


Bacon, Rt. Hn. Alice
Buchanan, Richard (G'gow, Sp'burn)
Dempsey, James


Baxter, William
Butler, Herbert (Hackney, C.)
Dewar, Donald


Beaney, Alan
Butler, Mrs. Joyce (Wood Green)
Doig, Peter


Bence, Cyril
Cant, R. B.
Dunnett, Jack


Bennett, James (G'gow, Bridgeton)
Carmichael, Neil
Dunwoody, Mrs. Gwyneth (Exeter)


Binns, John
Carter-Jones, Lewis
Eadie, Alex


Blackburn, F.
Chapman, Donald
Edwards, Robert (Bilston)


Blenkinsop, Arthur
Coleman, Donald
Ennals, David


Boardman, H. (Leigh)
Concannon, J. D.
Ensor, David


Booth, Albert
Dalyell, Tam
Evans, Fred (Caerphilly)


Boston, Terence
Darling, Rt. Hn. George
Fernyhough, E.


Bottomley, Rt. Hn. Arthur
Davidson, Arthur (Accrington)
Finch, Harold




Fitch, Alan (Wigan)
Lawson, George
Panned, Rt. Hn. Charles


Fletcher, Raymond (Iikeston)
Leadbitter, Ted
Parker, John (Dagenham)


Fletcher, Ted (Darlington)
Lee, Rt. Hn. Jennie (Cannock)
Pavitt, Laurence


Foot, Michael (Ebbw Vale)
Lee, John (Reading)
Pearson, Arthur (Pontypridd)


Ford, Ben
Lestor, Miss Joan
Pentland, Norman


Forrester, John
Lewis, Arthur (W. Ham, N.)
Perry, Ernest G. (Battersea, S.)


Fowler, Gerry
Lewis, Ron (Carlisle)
Perry, George H. (Nottingham, s.)


Freeson, Reginald
Lomas, Kenneth
Price, Thomas (Westhoughton)


Galpern, Sir Myer
Loughlin, Charles
Probert, Arthur


Gardner, Tony
Lyons, Edward (Bradford, E.)
Rankin, John


Golding, John
Mabon, Dr. J. Dickson
Richard, Ivor


Gregory, Arnold
McBride, Neil
Roberts, Rt. Hn. Goronwy


Grey, Charles (Durham)
McCann, John
Roberts, Gwilym (Bedfordshire, S.)


Griffiths, David (Rother Valley)
MacColl, James
Rodgers, William (Stockton)


Griffiths, Eddie (Brightside)
MacDermot, Niall
Ross, Rt. Hn. William


Hamilton, James (Bothwell)
McElhone, Frank
Ryan, John


Hamilton, William (Fife, W.)
McGuire, Michael
Shaw, Arnold (Ilford, S.)


Hamling, William
Mackenzie, Gregor (Rutherglen)
Silverman, Julius


Hannan, William
Mackie, John
Slater, Joseph


Harper, Joseph
Maclennan, Robert
Small, William


Harrison, Walter (Wakefield)
McMillan, Tom (Glasgow, C.)
Spriggs, Leslie


Haseldine, Norman
McNamara, J. Kevin
Steele, Thomas (Dunbartonshire, W.)


Hattersley, Roy
MacPherson, Malcolm
Swain, Thomas


Hazell, Bert
Mahon, Simon (Bootle)
Taverne, Dick


Henig, Stanley
Mallalieu, E. L. (Brigg)
Thomas, Rt. Hn. George


Herbison, Rt. Hn. Margaret
Mallalieu, J.P.W. (Huddersfield, E.)
Tinn, James


Hilton, W. S.
Mapp, Charles
Tuck, Raphael


Hooley, Frank
Marks, Kenneth
Varley, Eric G.


Horner, John
Mellish, Rt. Hn. Robert
Wainwright, Edwin (Dearne Valley)


Howell, Denis (Small Heath)
Millan, Bruce
Walker, Harold (Doncaster)


Howie, W.
Miller, Dr. M. S.
Watkins, David (Consett)


Hoy, Rt. Hn. James
Milne, Edward (Blyth)
Watkins, Tudor (Brecon &amp; Radnor)


Huckfield, Leslie
Mitchell, R. C. (S'th'pton, Test)
Weitzman, David


Hughes, Roy (Newport)
Molloy, William
Well beloved, James


Hunter, Adam
Morris, Alfred (Wythenshawe)
Wells, William (Walsall, N.)


Jay, Rt. Hn. Douglas
Morris, Charles R. (Openshaw)
Wilkins, W. A.



Morris, John (Aberavon)
Willey, Rt. Hn. Frederick


Jeger, George (Goole)
Moyle, Roland
Williams, Clifford (Abertillery)


Jenkins, Hugh (Putney)
Neal, Harold
Willis, Rt. Hn. George


Jenkins, Rt. Hn. Roy (Stechford)
Newens, Stan
Wilson, Rt. Hn. Harold (Huyton)


Jones, Dan (Burnley)
Oakes, Gordon
Winnick, David


Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
O'Halloran, Michael
Woodburn, Rt. Hn. A.


Jones, J. Idwal (Wrexham)
Orbach, Maurice
Woof, Robert


Jones, T. Alec (Rhondda, West)
Oswald, Thomas



Judd, Frank
Owen, Will (Morpeth)
TELLERS FOR THE NOES:


Kelley, Richard
Padley, Walter
Mr. R. F. H. Dobson and


Kerr, Russell (Feltham)
Page, Derek (King's Lynn)
Mr. Ioan L. Evans.

The CHAIRMAN, being of the opinion that the principle of the Clause and any matters arising thereon had been adequately discussed in the course of debate on the Amendments proposed thereto, forthwith put the Question, pursuant to Standing Order No. 47 (Debate on Clause or Schedule standing part), That the Clause stand part of the Bill.

Question agreed to.

Clause I ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without Amendment.

7.11 p.m.

Mr. Taverne: I beg to move, That the Bill be now read the Third time.
In Committee there was some repetition of arguments that we had heard earlier. I do not intend to go over the ground a third time, but shall make three short points.
First, there has been a slight lack of enthusiasm in pressing the opposition to this Measure. I am not casting any reflection on the quality of the speeches from the benches opposite. But if it will have a devastating effect on small companies, as the Opposition as a whole apparently thought, one would have expected larger numbers of hon. Members to take part in the onslaught against it.
Secondly, the hon. Member for Worthing (Mr. Higgins) asked whether I could make it clear that I do not necessarily hold the same view about the duration of the Measure as my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman). My hon. Friend made an excellent speech, but on that point I was not entirely with him. If he had been allowed to move that the Bill should be extended for four years, I would have felt bound to oppose that Amendment.

Mr. Speaker: Order. The hon. and learned Gentleman can discuss only what is in the Bill.

Mr. Taverne: I stressed on Second Reading that the Bill was temporary, but some Press reports at the time seemed to exaggerate the effect of some of what I said A headline in one paper suggested that I foresaw the early end of import deposits. It is important to get this point clear. Therefore, I repeat what I said at the beginning of our Second Reading debate, which I think is of some importance and would have thought puts the matter beyond doubt:
I am not seeking by any hint or suggestion to indicate when or how or whether it may be possible to modify or terminate the scheme before that date."—[OFFICIAL REPORT, 17th November, 1969; Vol. 791, c. 871–2.]
"That date" was 5th December, 1970.
Thirdly, I was asked by the hon. Member for Worthing, and, I believe, by the hon. Member for Barkston Ash (Mr. Alison) why there had been a change of mind since May, or since last year. The Letter of Intent of 22nd May simply stated that it was the Government's policy to abolish the import deposits scheme as soon as the balance of payments allowed. That did not say anything about a specific date. It was true that when the Measure was introduced last year we did not expect that it would be renewed. But as the end of the period came near we had to look at it again and decide whether we should allow it to run down or seek to renew it. We decided that it was safer, common sense, and more consistent with overall policy, to renew it.
It is true that there has perhaps been a change of emphasis in the arguments. That point has been made against us, and I am ready to concede it. We still use the three arguments mentioned last year, although we put a slightly different emphasis on them. It is not simply a question of disliking the withdrawal symptoms, as the hon. Member for St. Ives (Mr. Nott) suggested. He drew a parallel with "pot". Whatever his knowledge of the import deposits scheme, he did not show a profound knowledge of "pot", which does not in itself involve withdrawal symptoms. It is not the withdrawal symptoms about which we are concerned. The emphasis may have been changed, but the three basic arguments which were mentioned last year are still valid: hence the Bill.

7.15 p.m.

Mr. Higgins: The Financial Secretary has suggested that there is a lack of enthusiasm in the opposition to the Bill, and the Minister of State, in winding up the debate on Second Reading, also suggested that perhaps we were not enthusiastic about that opposition. Nothing could be further from the truth.
Our feeling throughout has been that on the point of principle the Bill is very objectionable. I think that the reason that suggestion came into the Minister of State's speech was largely that the first part of it seemed to be an Oxford Union speech for all occasions, and I can only assume that that part happened to be in his Oxford Union speech for all occasions.

Mr. William Rodgers: I never spoke at the Oxford Union. Has the hon. Gentleman noted that there is precisely one hon. Member on his back benches, which does not suggest great enthusiasm or opposition?

Mr. Higgins: I might also draw attention to the number of speeches that there have been from the hon. Gentleman's side of the House.
The debate has been severely inhibited, as I tried to point out on the last few Amendments, by the way in which the Money Resolution has deliberately been drawn very tightly. That is why we have had not had the number of Amendments raising constituency questions that we had last year. This is deplorable, because a number of constituencies and industries are affected, and the fact that the Government are not prepared to face up to criticism of this kind is no excuse. I think that that is the main reason why, in the earlier stages this afternoon, we did not have the kind of debates we had last year.
The Government would be grossly mistaken if they supposed that because that was so, and because their tactic has been successful in this sense, there is not, nevertheless, very strong feeling on the subject among small businessmen, importers and those who use imported raw materials. Therefore, for reasons which I shall explain later, I think that we shall find that the opposition to the Bill grows as the year progresses, even though at present it may not be


articulated very clearly because of the rules of order.
The three main arguments advanced by the Treasury in favour of the Bill require a little more analysis than we have given them so far. I do not think that this is to be repetitious; it is a highly complex subject, and it is necessary to go into it in reasonable detail.
The priorities the Government mentioned last year for the Measure— restricting imports first and restricting credit second—have been reversed this year. The emphasis has been much more on the credit restriction than on the restriction of imports, and we have also had the additional point mentioned by the Financial Secretary on Second Reading of the effect on the reserves. Therefore, it is right to go into some of the arguments discussed, in as much as they affect the Bill as it stands, which is what we are now concerned with.
With regard to the credit policy, it is clear that the Government are taking very strong and powerful measures. I have never been against the use of monetary policy, provided that it is used sensibly. If the Government had listened to what we said earlier we should never have got into a position of the money supply being increased at a tremendous rate until quite recently. We accept that the scheme may be a useful tool, but there is grave danger, in that at present we are having a switch-round of the money supply, and the Bill adds to its impact, which is unprecedented in this country or any country, making allowances for the size of the total economy. We do not know what the effect of such a change in the money supply will be, because we have no precedent. Therefore, for this reason as well, we have doubts about the Bill.
The other point which arises here is that we do not know what the length of the lag is as far as the impact of monetary policy is concerned. It may well be that the lag is such that the big change round we have seen recently in money supply will have a traumatic effect in the coming months. But these things are complicated and difficult to foresee. Nevertheless, we are in uncharted waters here and that is another reason for our doubts.
I suggested on Second Reading that one of the reasons for the Bill was that the Government were worried about the effect of wage inflation because they had set the pace in the public sector. Nothing I have read since gives me any cause for less alarm.

Mr. Speaker: Order. The hon. Gentleman must resist the temptation to make a Second Reading speech in a Third Reading debate.

Mr. Higgins: I am seeking to do that, Mr. Speaker. Indeed, have been trying hard for some time.
The Bill as it stands is designed to have an impact on credit and one would expect this to come into conflict with increasing wage claims. The latest is the one announced in the Financial Times today of 20 per cent. for airline staff. This is quite inconsistent with the Government's incomes policy and is only the latest example. We therefore have this conflict between credit restraint, of which the Bill forms part, and wage inflation, and we shall find bankruptcies arising this winter of the kind we have complained about and are likely to see a squeeze on importers. That being so, either we have this sort of situation or prices must go up, so that we should be back to the old spiral and the Bill will have failed in its purpose.
On Second Reading, the hon. and learned Gentleman suggested that we should support the Bill and its effect on credit. He has had to persuade us, first, that the policy of credit restraint is helping economic recovery and that failure to apply it would do more harm than good. But he has to make a third point and it is one which he has not yet advanced, even now. He has to suggest that credit restraint of the kind produced by the Bill is preferable to any other measure which might produce the same degree of credit restraint. But the Government are in some difficulties because they have been unable to give us some estimate of how much effect on credit restraint this scheme has had.

Mr. Taverne: I was specific on Second Reading about that. Just before the passage to which the hon. Gentleman has referred, I cited the degree of money which would not be going back now— £90 to £100 million down to £20 million—because of the scheme. I said that


this had a direct effect on credit, and it is quantified.

Mr. Higgins: I accept the point, but I have a qualification to add. If that is so, the hon. and learned Gentleman must make the point, if his case is to succeed, that this is the right way of doing it rather than by any other proposal. As we have pointed out consistently, the fact is that this Measure has a number of other objectionable features which will effectively invalidate it as a means of achieving price and credit restraint. The Government are taking many other measures in this sector. We do not accept this as the only possible method, or that it is necessary, because of technical factors such as uncertainty of monetary policy and the time lags involved.
The Bill is objectionable in principle, particularly with regard to our E.F.T.A. partners. It has brought out a number of protectionist elements opposite, despite the hon. and learned Gentleman's statement that it was not intended to encourage protectionism elsewhere. I am sure that that is right, but the danger of this kind of thing and of extending it further is something which the Government should be aware of.
The argument for the scheme has changed a little between last year and this. This year, we had a third reason. We were given as reasons not merely credit restraint or import restraint but also the question of the effect on the reserves. In that context, this is surprising because, on Second Reading last year, the then Financial Secretary, speaking of the effect of the Bill on the reserves, said:
To the extent that borrowing from abroad does occur, there will be a marginal advantage to the reserves, which is not a bad thing."—[OFFICIAL REPORT, 28th November 1968; Vol. 774, c. 753.]
This was a little inconsistent with his other statements at the same time about the importance of not financing the balance of payments from hot money.
The Minister has stressed that in a number of debates in the House. Yet the fact is that the effect of the Act and the effect of this Bill will be effectively to bring into this country money which clearly the Government recognise as hot. Indeed, one of the main reasons for the Bill is that the Government are worried

that, if they end the scheme, this money will flow out of the country again.
Earlier, we had some discussion of the size of the current trade surplus, the level of invisible earnings, and so on. We welcome the improvement that has taken place both in invisible earnings and in current trade surpluses, but, clearly, the Government—and this is an overwhelming consideration in their mind—are still not in a position to take off this scheme and face the loss of reserves which they believe would follow.
My personal view is that, if that hot money is here and circumstances continue to improve, there is a case anyway probably for getting rid of it. On the other hand, if the situation is likely to get worse—as we all hope that it will not—even so, one would have thought, on the argument of the former Financial Secretary, that this was a dangerous thing to have happening, because it means a constant repetition of the Bill and the Government never finding themselves in the position of being able to take the scheme off. This is the worrying factor.
So our over all feeling is that the Bill is objectionable, that the Measure was originally one we should not have supported, and that we should not support its continuance. It is right, therefore, that we should oppose it on Third Reading because we believe that it will not lead to a significant improvement in our economic situation. It may, indeed, both in the fairly close future and certainly in the long run, have an adverse rather than a favourable effect on the economy. For all these reasons, I hope that my right hon. and hon. Friends will join me in voting against the Bill.

Mr. Nott: When the Ways and Means Resolution for the 1968 Act was introduced just over a year ago, I think I made one of the first speeches against the Measure. I feel that I may now make one of the last speeches against this scheme before, I hope, it is repealed by a new Tory Government. This country cannot afford to indulge in measures which in any way restrict the further liberalisation of world trade. The hon. and learned Gentleman may be a protectionist but I believe that this country has everything to gain from freer trade, since we are a major trading nation. These arguments were understood and


advanced and supported by the former Financial Secretary.
7.30 p.m.
I hope that the present Financial Secretary, with his training in the law, will, in future debates on financial affairs, not misquote hon. Members on this side of the House in support of his arguments. I take two examples of comments he made earlier today in discussion of this Bill. I never said—and I have been to check this in the OFFICIAL REPORT—that imports would be sucked in if the scheme were ended. When I used the term "sucked in", I was referring specifically to what would happen when the brakes were taken off the economy generally if we had full capacity at the time. It was specifically in relation to capacity that I referred to imports and their effect upon the balance of payments.
He also commented on remarks I made a year ago, when he spoke in the Second Reading debate, and said that I had said that it would move productive capacity from exporting into domestic production. The hon. and learned Gentleman said that in fact there had been no disruption of trade and that exports had soared and that in other words my forecast had been inaccurate. What I said on that occasion was that the scheme would
have immediate beneficial effects on the balance of payments—I do not doubt that—it will have highly adverse medium and long-term effects on the economy …"—[OFFICIAL REPORT, 26th November, 1968; Vol. 774, c. 208.]
I hope that the hon. and learned Gentleman will not continue to attribute to hon. Members on this side of the House comments which they never made in order that he may knock them down. When he was Minister of State, his colleagues released him from his cage only to make comments on important matters such as the administration of the Decimal Currency Board. Now that he has moved up the Treasury ladder, I hope that he will keep to the same precise and detailed comments about hon. Members' speeches which his predecessor made.
I have never denied that the scheme will have some marginal effect on imports; it clearly has had. There may be slight differences of opinion among my hon. Friends about its precise effect on imports. As the Financial Secretary said,

it is extremely difficult to quantify. My belief is that the effect on imports is marginal. But its major effect, quite different from that which the Government intended, has been on credit restraint.
Its effect has been strange. Many importers have been able to finance their stocks by foreign short-term borrowing and to that extent importers have managed entirely to evade the Government's credit restrictions. But domestic producers who have not been substantial importers, and may have been substantial exporters, have been subject to the full rigours of the credit squeeze and have not been able to finance their stocks by foreign borrowing. For this reason, I contend that the scheme could have been deleterious, and not beneficial even in the short term, although I recognise that it has had some marginal effect on imports.
My major objection to this type of scheme is that in the long run it must transfer capacity from export production to domestic production. If a measure of this sort remains in operation, what will happen is that the cost of importing will be higher and capacity will be taken up by British manufacturers producing goods which were previously imported. In my view some spare capacity should be kept available for exports in order to achieve what is the intention of us all, an exportled boom. Once we start restricting imports by this type of Measure, that spare capacity is taken up for domestic production in order to meet the demand for goods of the type previously coming from overseas. Its net effect will not be beneficial to our payments in spite of its restrictions upon world trade.
The major effect has been to increase the country's short-term borrowing from overseas by enabling borrowing abroad to finance the stocks of certain importers. As I said in Committee, once again there is another problem which the country will have to face in the medium term. We will have to repay what my hon. Friend the Member for Worthing (Mr. Higgins) described as hot money. I do not know that I would describe it as that, but it is money borrowed to finance British stocks and it will have to be repaid.
It is all very well for the Government to take these measures which help them in the very short and immediate term


with the balance of payments, but it is high time that they showed more concern for the medium- and long-term and fundamental effects on the economy of this type of measure. We depend on more capacity and we need more capacity and more investment. We need greater liberalisation of world trade.
The whole of the import deposits scheme has been most damaging to the

country. It has helped the Government's policy of credit restraint marginally and I accept that it may have marginally cut imports, but it has put round our necks further problems which, in six months or a year's time, when the scheme ends, some Government will have to face.

Question put:—

The House divided: Ayes 172, Noes 123.

Division No. 14.]
AYES
[7.37 p.m.


Albu, Austen
Gardner, Tony
Mitchell, R. C. (S'th'pton, Test)


Allaun, Frank (Salford, E.)
Golding, John
Molloy, William


Atkins, Ronald (Preston, N.)
Gregory, Arnold
Morris, Alfred (Wythenshawe)


Atkinson, Norman (Tottenham)
Grey, Charles (Durham)
Morris, Charles R. (Openshaw)


Bacon, Rt. Hn. Alice
Griffiths, David (Rother Valley)
Morris, John (Aberavon)


Baxter, William
Griffiths, Eddie (Brightside)
Moyle, Roland


Beaney, Alan
Hamilton, James (Bothwell)
Neal, Harold


Bence, Cyril
Hamilton, William (Fife, W.)
Newens, Stan


Bennett, James (G'gow, Bridgeton)
Hannan, William
Norwood, Christopher


Binns, John
Harper, Joseph
Oakes, Gordon


Blackburn, F.
Harrison, Walter (Wakefield)
O'Halloran, Michael


Boardman, H. (Leigh)
Haseldine, Norman
Orbach, Maurice


Booth, Albert
Hazell, Bert
Oswald, Thomas


Boston, Terence
Herbison, Rt. Hn. Margaret
Owen, Will (Morpeth)


Bottomley, Rt. Hn. Arthur
Hilton, W. S.
Padley, Walter


Boyden, James
Hooley, Frank
Page, Derek (King's Lynn)


Bradley, Tom
Horner, John
Pannell, Rt. Hn. Charles


Broughton, Sir Alfred
Howell, Denis (Small Heath)
Pavitt, Laurence


Brown, Hugh D. (G'gow, Provan)
Howie, W.
Pearson, Arthur (Pontypridd)


Buchanan, Richard (G'gow, Sp'burn)
Huckfield, Leslie
Pentland, Norman


Butler, Herbert (Hackney, C.)
Hunter, Adam
Perry, George H. (Nottingham, S.)


Butler, Mrs. Joyce (Wood Green)
Jay, Rt. Hn. Douglas
Prentice, Rt. Hn. Reg.


Callaghan, Rt Hn. James
Jenkins, Hugh (Putney)
Price, Thomas (Westhoughton)




Probert, Arthur


Cant, R. B.
Jones, Dan (Burnley)
Rankin, John


Carmichael, Neil
Jones, J. Idwal (Wrexham)
Richard, Ivor


Chapman, Donald
Jones, T. Alec (Rhondda, West)
Roberts, Rt. Hn. Goronwy


Coleman, Donald
Judd, Frank
Roberts, Gwilym (Bedfordshire, S.)


Concannon, J. D.
Kelley, Richard
Robertson, John (Paisley)


Dalyell, Tam
Kerr, Russell (Feltham)
Rodgers, William (Stockton)


Darling, Rt. Hn. George
Lawson, George
Shaw, Arnold (Ilford, S.)


Davidson, Arthur (Accrington)
Leadbitter, Ted
Silverman, Julius


Davies, Ednyfed Hudson (Conway)
Lee, Rt. Hn. Jennie (Cannock)
Slater, Joseph


Davies, G. Elfed (Rhondda, E.)
Lestor, Miss Joan
Small, William


Davies, Rt. Hn. Harold (Leek)
Lewis, Ron (Carlisle)
Spriggs, Leslie


Davies, S. O. (Merthyr)
Lomas, Kenneth
Steele, Thomas (Dunbartonshire, W.)


Dempsey, James
Lyon, Alexander W. (York)
Swain, Thomas


Dewar, Donald
Lyons, Edward (Bradford, E.)
Taverne, Dick


Dobson, Ray
Mabon, Dr. J. Dickson
Thomas, Rt. Hn. George


Doig, Peter
McBride, Neil
Tinn, James


Dunwoody, Mrs. Gwyneth (Exeter)
McCann, John
Varley, Eric G.


Eadie, Alex
MacColl, James
Wainwright, Edwin (Dearne Valley)


Edwards, Robert (Bilston)
MacDermot, Niall
Walker, Harold (Doncaster)


Edwards, William (Merioneth)
McElhone, Frank
Watkins, David (Consett)


English, Michael




Ennals, David
McGuire, Michael
Watkins, Tudor (Brecon &amp; Radnor)


Ensor, David
Mackenzie, Gregor (Rutherglen)
Weitzman, David


Evans, Fred (Caerphilly)
Maclennan, Robert
Wellbeloved, James


Evans, Ioan L. (Birm'h'm, Yardley)
McMillan, Tom (Glasgow, C.)
Wells, William (Walsall, N.)


Fernyhough, E.
McNamara, J. Kevin
Wilkins, W. A.


Finch, Harold
MacPherson, Malcolm
Willey, Rt. Hn. Frederick


Fitch, Alan (Wigan)
Mahon, Simon (Bootle)
Williams, Clifford (Abertillery)


Fletcher, Raymond (Ilkeston)
Mallalieu, E. L. (Brigg)
Willis, Rt. Hn. George


Fletcher, Ted (Darlington)
Mallalieu, J. P. W.(Huddersfield, E.)
Winnick, David


Foot, Michael (Ebbw Vale)
Mapp, Charles
Woodburn, Rt. Hn. A.


Ford, Ben
Marks, Kenneth
Woof, Robert


Forrester, John
Mellish, Rt. Hn. Robert



Fowler, Gerry
Millan, Bruce
TELLERS FOR THE AYES:


Freeson, Reginald
Miller, Dr. M. S.
Mr. William Hamling and


Galpern, Sir Myer
Milne, Edward (Blyth)
Mr. Ernest G. Perry.




NOES


Alison, Michael (Barkston Ash)
Balniel, Lord
Boardman, Tom (Leicester, S. W.)


Allason, James (Hemel Hempstead)
Bennett, Dr. Reginald (Gos. &amp; Fhm)
Body, Richard


Atkins, Humphrey (M't'n &amp; M'd'n)
Bessell, Peter
Boyd-Carpenter, Rt. Hn. John


Baker, W. H. K. (Banff)
Biffen, John
Brewis, John




Brown, Sir Edward (Bath)
Heald, Rt. Hn. Sir Lionel
Nott, John


Bruce-Gardyne, J.
Heseltine, Michael
Page, Graham (Crosby)


Buchanan-Smith, Alick (Angus, N &amp; M)
Higgins, Terence L.
Peel, John


Buck, Antony (Colchester)
Hill, J. E. B.
Percival, Ian


Bullus, Sir Eric
Holland, Philip
Pike, Miss Mervyn


Campbell, B. (Oldham, W.)
Hornby, Richard
Pounder, Rafton


Campbell, Gordon (Moray &amp; Nairn)
Hunt, John
Prior, J. M. L.


Carlisle, Mark
Jenkin, Patrick (Woodford)
Pym, Francis


Cary, Sir Robert
Jennings, J. C. (Burton)
Ramsden, Rt. Hn. James


Chataway, Christopher
Johnston, Russell (Inverness)
Rhys Williams, Sir Brandon


Clegg, Walter
King, Evelyn (Dorset, S.)
Rodgers, Sir John (Sevenoaks)


Cooke, Robert
Lancaster, Col. C. G.
Rossi, Hugh (Hornsey)


Corfield, F. V.
Lane, David
Russell, Sir Ronald


Costain, A. P.
Lawler, Wallace
St. John-Stevas, Norman


Crowder, F. P.
Legge-Bourke, Sir Harry
Scott-Hopkins, James


Cunningham, Sir Knox
Lubbock, Eric
Shaw, Michael (Sc'b'gh &amp; Whitby)


Currie, G. B. H.
McAdden, Sir Stephen
Silvester, Frederick


Dalkeith, Earl of
MacArthur, Ian
Sinclair, Sir George


Dance, James
Mackenzie, Alasdair (Ross &amp; Crom'ty)
Smith, Dudley (W'wick &amp; L'mington)


Dean, Paul
Maclean, Sir Fitzroy
Stainton, Keith


Deedes, Rt. Hn. W. F. (Ashford)
Macleod, Rt. Hn. Iain
Stoddart-Scott, Col. Sir M.


Dodds-Parker, Douglas
McMaster, Stanley
Summers, Sir Spencer


Eden, Sir John
McNair-Wilson, Michael
Taylor, Sir Charles (Eastbourne)


Elliot, Capt. Walter (Carshalton)
Maddan, Martin
Thatcher, Mrs. Margaret


Ewing, Mrs. Winifred
Maginnis, John E.
Waddington, David


Farr, John
Maxwell-Hyslop, R. J.
Walker, Peter (Worcester)


Fortescue, Tim
Maydon, Lt.-Cmdr. S. L. C.
Walker-Smith, Rt. Hn. Sir Derek


Glover, Sir Douglas
Mills, Stratton (Belfast, N.)
Ward, Christopher (Swindon)


Gower, Raymond
Miscampbell, Norman
Ward, Dame Irene


Grant, Anthony
Mitchell, David (Basingstoke)
Whitelaw, Rt. Hn. William


Grant-Ferris, Sir Robert
Monro, Hector
Wiggin, A. W.


Griffiths, Eldon (Bury St. Edmunds)
Montgomery, Fergus
Williams, Donald (Dudley)


Gurden, Harold
More, Jasper
Wolrige-Gordon, Patrick


Hall-Davis, A. G. F.
Morgan, Geraint (Denbigh)
Worsley, Marcus


Hamilton, Michael (Salisbury)
Mott-Radclyffe, Sir Charles
Wylie, N. R.


Harrison, Brian (Maldon)
Munro-Lucas-Tooth, Sir Hugh



Harrison, Col. Sir Harwood (Eye)
Nabarro, Sir Gerald
TELLERS FOR THE NOES:


Hawkins, Paul
Neave, Airey
Mr. Reginald Eyre and




Mr. Timothy Kitson.

Bill accordingly read the Third time, and passed.

RENT (CONTROL OF INCREASES) BILL

Considered in Committee.

[Mr. SYDNEY IRVING in the Chair]

Clause 1

RESTRICTIONS ON INCREASES IN LOCAL AUTHORITY RENTS

7.45 p.m.

Mr. Graham Page: I beg to move Amendment No. 1, in page 1, line 18, at end insert:
(d) in the absence of the increases it will be necessary for the local authority, in the observance of their obligations as to revenue and expenditure, to increase the general rate.

The Chairman: With this Amendment we can also discuss Amendments No. 3, in Clause 3, page 2, line 43, after 'by', insert:
'information as to the state of the financial reserves upon which the local authority will be obliged to draw in the event of the Minister being unable to agree to the proposals and'.
and Amendment No. 4, in Clause 3, page 2, line 43, after 'such', insert 'further'.

Mr. Page: This is an Amendment to Clause 1, which sets out the restrictions on increases in local authority rents. Subsection (1) says:
A local authority shall not, for any period beginning before 1st July, 1971 … charge in respect of houses … rents exceeding the former rents …
except in certain cases.
Those cases are set out in the three paragraphs in the subsection. One is the limit of 10s. in any individual case, or an average of 7s. 6d. for a group of houses. Paragraph (b) allows an increase when proposals have been put to the Minister and the Minister has agreed to them. Paragraph (c) allows increases when they can be attributed to improvements or extensions to the house. This Amendment would add a fourth case, where unless the increase is made, it would be necessary for the local authority in carrying out its duties of expenditure and revenue in connection with housing to increase the general rate.
Amendments Nos. 3 and 4 which we are discussing with this are Amendments to Clause 3, dealing with the proposals

to the Minister which I have mentioned. If the Minister accepts the proposals then the rent may be increased beyond the 10s.—7s. 6d. limit. The Amendments to Clause 3 seek to insert an obligation on a local authority, when making its proposals to the Minister, to tell him what reserves it has or has not upon which to draw in the event of his not agreeing to its proposal to increase the rents above the limits set out in the Bill. They would be telling the Minister which of the kids' piggy banks they would break into to make up the deficit.
In explaining these Amendments I will refer to Report No. 62 of the National Board for Prices and Incomes, "Increases in Rents of Local Authority Housing", to which the Minister of State referred on Second Reading. Although it was published in April, 1968, and although the figures must be out of date, the facts set out in that report are still correct and are relevant to the Amendment. The report carefully explains on page 2, in paragraph 7:
The local housing authorities are required by statute to make 'reasonable charges' for their dwellings. This requirement has been interpreted by the Courts to mean broadly that a reasonable balance should be maintained as between tenants and groups of tenants, and between the general body of ratepayers and council tenants as a whole.
In practice, that gives local authorities wide powers to set rents as they please. The report explains in paragraph 8,
Within this fairly wide area … local housing authorities have to observe certain rules.
Those rules apply to the keeping of two separate accounts—a separate housing revenue account and a separate housing repairs account. The separate housing revenue account has to be maintained to show the expenditure and income relating to the authority's council houses. The report states:
A deficit on the Account cannot be carried forward from one year to the next, and has to be made good by a contribution from the rates.
This is the point which is relevant to the Amendment. If there is to be a deficit on the housing revenue account, that must be made up from some source, whether it be from the rents, from a rate contribution or by some manipulation—and I do not mean that in any wrong way—of the account from the point of


view of the capital repayment to that account.
There is then reference to the housing repairs account, to which there must be a minimum contribution from the housing revenue account of £8 per dwelling per year. Most local authorities distribute the costs of their housing and therefore charge rents over the entire housing stock, generally making allowances for differences in the age of houses or the amenities. In this way the costs are spread over. That method of distributing costs is usually known as rent pooling.
The report explains that the Prices and Incomes Board studied a number of local authorities to discover the reasons attributed for rent increases. The board found that 21 per cent. of the local authorities reported that they considered that the most important factor to which the rise could be attributed was the rising housing programme; 16 per cent. thought that it was the rising cost of maintenance and repair; 15 per cent. thought that it was the rising cost of construction; 29 per cent. thought that it was rising interest rates; and 4 per cent. reported that the reduction on the abolition of the rate fund contributions to the housing revenue account was the main cause of rent increases. The report adds:
Only 4 per cent. suggested that the increases might be due to a change in or the introduction of a rebate scheme.
This report was published in April, 1968. It referred to increases in the building programme. I imagine from the very severe reduction in the housing programme that at present this is not such an important factor and that it is not necessary to spread the cost of the rising housing programme over all the rents of council houses because the programme is no longer rising. Because of the Government's extraordinary policy, it is dropping.
Probably moving to the top of the list is construction costs, which have increased substantially and which will increase in future if the wage demands of the employees in the construction industry are granted in full—as, indeed, there seems to be every indication that they will be granted. The increase in the cost of building houses, therefore, will find its reflection in the rents when spread over the

whole of the stock in any one local authority.
The corresponding increase in the cost of repairs will also result, and in the past has resulted, in the need for an increase in rents. The increase in management costs has the same effect. Many local authorities attributed some of the most substantial rises in rents to the increase in interest rates. The report mentions the short-term borrowing from the Euro-dollar market as an increasing cost of local authority housing.
Only a few weeks ago I was in Tanzania talking to the chief of the Bank of Tanzania and teasing him about the control which he had over his Government by controlling the money in his bank and lending it to his Government.

The Minister of State, Scottish Office (Dr. J. Dickson Mabon): Order.

Mr. Page: Apparently the hon. Member thinks that I am out of order. I will tell him why I am in order. I asked the chief of that bank the rate of interest he paid to his depositors, and he said that it was 8½ per cent. I said, "I suppose that you lend it to your Government as you choose and control their policies in that way". He replied, "No. I lend it to councils in your country at 11 per cent." That is from Tanzania—a country asking for aid from us. If that is the sort of borrowing that local authorities do, there is little wonder at the expense which is reflected in their housing programmes.

Mr. Eric Lubbock: Could the hon. Member exercise his influence on his friend and get me an overdraft with the Bank of Tanzania?

Mr. Page: The hon. Member for Orpington (Mr. Lubbock) will understand that I asked exactly the same question when I first heard of the rate of interest on deposits.
It may be said that local authority borrowing for the purposes of housing is subsidised by the Government in that a local authority pays only 4 per cent. on the money which it borrows and the balance is a subsidy. But of course all that money is put into one kitty at the pool rate, as it is called, so that it is a little more than a drop in the ocean. When a local authority is borrowing at


such a high rate of interest for other purposes and is spreading the money all over, at an average, in fact it is not building or repairing its houses with money borrowed at 4 per cent.

Mr. Frank Allaun: Under the hon. Member's proposal, the whole burden of looking after the area of the local authority, with high interest rates, and so on, and not simply the expense of council houses, would be laid upon the council tenant.

8.0 p.m.

Mr. Page: The hon. Member has not read the Amendment correctly. I have read it to the Committee and I shall not do so again. I ask the hon. Member to read it.
It is frequently said that, for housing, local councils borrow money at a very low rate of interest because anything above 4 per cent. is subsidised. That interest is spread over the whole of the local authority activities and the money is then taken out of the pool at the average rate of interest.

Mr. Julius Silverman: While it is true that the money is borrowed from what is called the Consolidated Fund at a general rate of interest, the subsidy is confined entirely to the housing revenue account.

Mr. Page: Yes. All I was trying to say is that when local authorities complain of the high rate of interest causing the necessity to increase rents, which is reported as a major complaint of the local authorities, it is no answer to them that they get their money at a very low rate of interest, because when allocated to the housing account it is not at that low rate, but at an average rate.

The Chairman: Order. I hesitate to interrupt the hon. Member, who is so scrupulously careful about the rules of order, but I find it a little difficult to relate his remarks to the Amendments, one of which concerns the absence of increases on the general rate and another of which is concerned with information. Perhaps the hon. Member will help me.

Mr. Page: I thought it necessary, Mr. Irving, to give the background about how local authorities accumulate reserves, to which reference is made in Amendment No. 3, and to deal with the question of

whether, when their reserves have run out, they have to resort to a rate fund contribution. If they have to resort to a rate fund contribution, they may have to increase the rates. That comes within Amendment No. 1. I think that the background which I was endeavouring to give is entirely relevant.
When one looks at the reasons for increases in rent, one sees that they are almost wholly attributable to the policies of the Government—for example, the increases in interest rates, the cost of construction and other things. It is by reason of those policies that increases in rent are necessary and the Government now say that those increases should fall upon the ratepayer.
The Amendment seeks to allow the local authority to make the increase and avoid an increase in the general rate. If the housing revenue account is in credit, it is not necessary to increase the general rate to keep within the law. Local authorities have to abide by certain rules, one of which is that they must keep their housing revenue account in credit. If they have any other source to which to resort, the Amendment would not come into operation, but where they can satisfy the Minister that the only way to obey the law and keep their housing revenue account in credit is to increase the rates, they should be given discretion either to charge the rents or to charge the ratepayers, as they see fit, in observing their duties as local government elected bodies.
In the Bill, local authorities are restricted to an increase of an average of 7s. 6d. a week instead of being allowed to strike a fair balance between council tenants as a whole and the general body of ratepayers, as was said to be their duty in the report of the Prices and Incomes Board. If this restriction imposed in the Bill comes into operation, it will cause great unfairness to the general body of ratepayers and will fail to keep a fair balance.

Mr. James Allason: My hon. Friend the Member for Crosby (Mr. Graham Page) has given examples to show why costs are rising. He rather dismissed the question of new house building, but let me assure him that in certain parts of the country new council house building can have a considerable effect. I am thinking of places


where rents are low for historic cost reasons. For example, a substantial number of houses might have been built at a time when building costs were cheap and, therefore, the rents are low. If, however, there has to be a further steady stream of council building next year or subsequently and a new scheme comes into operation, the new building will have a considerable effect. This is a good example of the sort of case that we must consider. Costs will rise considerably.
Under the Bill, a local authority will be entitled to raise its rents by an average of 7s. 6d. a week over its whole pool of houses. That figure might not be enough. The local authority then turns to the housing revenue account, finds that it is a little in credit and uses it all up, but even that is not enough. That is the situation that we are considering in Amendment No. 1.
Therefore, it falls squarely on the Government to say what they intend. Is it that the whole of the cost shall fall on the ratepayer and the rates must be increased, or would they in these circumstances wish rents further to increase, remembering the case to which I have referred, in which the historic costs are low and, therefore, rents are quite low?
There is a further alternative which I have posed to the Government on two occasions, but which they always dodge. The third alternative is the one which, I fear, will be used. That is to say, with new building there is no requirement to fix rents in line with the other rents charged by the local authority. Therefore, the local authority will be gravely tempted for new housing to fix a much higher rent than is charged for the rest of its pool of accommodation. To me, that it totally unacceptable.
Surely, that must be unacceptable to the Government, too. They will not say this or face the situation. I wish that they could say something about it. If it is their intention that these further costs, which cannot be absorbed in the way I have described, must fall on the ratepayer, let them say so and let us see that this is a Bill deliberately intended to increase the rates next year in the circumstances with which we are dealing. If that is what the Government say, fair enough, but for

goodness' sake let them come forward and face these three alternatives and say which one they prefer.

Mr. Julius Silverman: I intervene only briefly. I agree with the analysis which has been made of the factors in the costs and rents of council houses. New housing is one, rates of interest is another, increased cost of repairs is another, and the introduction of rebate schemes another. I agree entirely with the hon. Member for Hemel Hempstead (Mr. Allason) that for a number of authorities the construction of new houses means a major increase in costs.
What happens is this, and perhaps I can spell it out a little more clearly than the hon. Member. A local authority decides to build a number of new houses. The houses cost very much more than the old houses cost, and notwithstanding the Housing Subsidies Act the economic costs of those rents, even allowing for housing subsidies, will be very high, and, the council would say, much higher than the tenants of those houses can pay.
The hon. Gentleman agrees with me about that. So what does the authority do? It says that the tenants must pay the difference and must pay a subsidy. If it is necessary to build these new houses one would have thought that at any rate the ratepayers would pay a share of the cost instead of the council's going to the council house tenants and saying, "Because we are enlarging our housing programme you will have to pay the bill." This is resented by council tenants, and quite understandably; and to say that the whole of this cost should be borne by existing council tenants is wholly wrong. That is the first point.
The introduction of rebate schemes is another case and it is dealt with in a subsequent Amendment on which I hope to catch your eye, Mr. Irving, later. I think that someone hopes that I shall not succeed, but, nevertheless, I shall try.
Other matters are the rates of interest and the increased cost of repairs. It is quite true that with houses which were built before the Housing Subsidies Act, the rate of interest is a major factor. I accept that. It is also true that the increased cost of repairs is a factor, and it is not unreasonable that the tenant should bear those costs, but I do not believez


that these increases can conceivably amount in any case to a total of more than 7s. 6d. An increase of 7s. 6d. a week for a year is certainly more than sufficient to take charge of those costs, even if all those costs are legitimate against the tenant.
Therefore, I agree entirely with what has been said, that there should be a balance between the ratepayer and the tenant but the balance should be struck in the right way, and this Amendment certainly does not do that.

8.15 p.m.

Mr. Wallace Lawler: I am not quite sure that I follow as fully as one ought the arguments advanced by the hon. Member for Hemel Hempstead (Mr. Allason) and the hon. Member for Birmingham, Aston (Mr. Julius Silverman). They have talked about current construction costs in the public sector. One would have thought that the 4 per cent. ceiling does protect the council tenant in this respect.
Furthermore, I am by no means influenced by the arguments of the hon. Member for Crosby (Mr. Graham Page). One should not accept automatically that an increase which goes above 7½ per cent. can be justified in terms of the state of the housing revenue account, say, two or three months before the close of the financial year and automatically be placed on the backs of the ratepayers.
There are one or two pertinent questions which arise from this, and certainly one rather interesting example. A few years ago one large local authority with which I was connected found a few months before the end of the housing year that a quite sizeable rents increase was anticipated and that a heavy deficit was in store. A conscientious housing officer would call the chairman of the housing committee into conference, and one would hope that he would confer with the housing committee itself, but in this case he had a few words with the chairman of the housing committee and pointed out the position which would arise in two or three months at the end of the housing year, the same position which this present Amendment is seeking to anticipate.
Ways and means were found to avoid the deficit during the succeeding few months. One of the ways was an in-

teresting example of what the hon. Member for Aston deplored in the debate last week: let us put a levy on each tenant, transferring one with another; let us put from 8s. to 15s. a week on each future letting of postwar dwellings. The hon. Member for Aston will remember the occasion. Someone closely connected with his own political party did this in the City of Birmingham.
I would be very interested, before making a final decision about the Amendment, to know the attitude of the Minister of State to this and whether he agrees with his colleague who in the debate last week said that it was perhaps a less painful way of avoiding the deficit. If that is the authoritative Government view it would be interesting to have an assurance that it is. There are tens of thousands of council house tenants who take an entirely opposite view and who think that it is quite wrong, but the present legislation leaves open the door very wide for a council still to employ, even in terms in excess of 7s. 6d. a week, the same kind of devious and, to my mind, most dishonest way of avoiding a deficit a few months before the end of the housing year.
I would repeat that it is not necessarily a "must" that any increase over 7s. 6d. should come from the ratepayer. A wise housing authority is able to see the size of its anticipated deficit on the housing account at least halfway through the housing year, and there are many and various ways which can be taken. I have mentioned one, with which I thoroughly disagree, but there are others—cuts, overdue perhaps, in heavy administrative costs, in some large authorities running at very high levels; value for money in expenditure, something with which almost every council tenant in the country would agree; streamlining of procedure in connection with repairs—perhaps allowing only three officials to visit a council house instead of six in connection with each repair. There are very many ways in which increased expenditure can be anticipated and avoided. It is a somewhat hopeless situation for the Opposition to suggest to us that we have simply to say, "Any increase above the level proposed in the Bill should be placed upon the backs of the ratepayers."
I hope that the Minister of State, who seems to find my contribution, which I


could not make last week because of illness, somewhat entertaining, will take this point rather seriously and give us an authoritative reply and an explanation of the attitude which the Minister of Stale takes with regard to the devious manner, which I have suggested, by which he is still leaving it open for local authorities to avoid deficits by a system of very wrong and totally unjustified differential rents for a very small section of council house tenants.

Dr. Dickson Mabon: We have had a good-natured debate, and I would be the last to disturb the tenor of our discussion. It might be suggested by some that the three Amendments which we are discussing could be described as wrecking Amendments, but I would not for a moment dream of using these terrible words.
I confirm the point made by the hon. Member for Crosby (Mr. Graham Page), that under the Fifth Schedule of the Housing (Financial Provisions) Act, 1958, every local authority has to make a contribution from the general rate fund to the housing revenue account to meet any deficit which may arise in that account in any financial year. Thus, in any year, if rents, exchequer subsidies and other income credited to the account do not meet the cost falling on the account, a rate contribution has to be made to make up that shortfall.
Whether the contribution, or an increase in the contribution, leads to an increase in the general rate depends upon the balance in the general rate fund and the extent to which the local authority is willing to run down the balance. I think that is why Amendments Nos. 1, 3 and 4 have been tabled. They are designed to provide the Minister with information about the authority's rate fund balances as well as housing account balances.
The Amendment, as drafted, is too imprecise to make any sense. It will be impossible to define or to state exactly when a rent increase is necessary to avoid an increase in the general rate. No authority can precisely estimate in advance, despite what the hon. Member for Birmingham, Ladywood (Mr. Lawler) has said. I am sorry that we were deprived of his company last week for health reasons, and I am glad that he is back in

health again. No authority can precisely estimate in advance what balance there will be in the rate fund as a result of expenditure on all rate-borne services.
Nor can it, as I think the hon. Member for Crosby will admit, estimate precisely the prospective deficit in the housing revenue account and the rate fund contribution which will be needed to meet that deficit. It would be impossible even for him to establish beyond argument whether the authority has reached the point where it is faced with a straight choice between a rent increase and an increase in the rate fund contribution. There will always be other alternatives open to the authority.
The hon. Member for Ladywood gave one alternative which he entirely rejected. He gave other alternatives which I would regard as being arguments which should apply in any local authority. They related not to policy but to administrative efficiency. That is not the monopoly of any one party but is enjoyed by certain individuals and denied to others—I will not go into who is who tonight. That is not a policy argument, but an argument of efficiency. It is a matter for consideration by the individuals in charge of any authority at any time.
There may be a balance left on the housing revenue account, the housing repairs account or the housing equalisation account; or the authority might be able to cut expenditure on maintenance, run up a deficit in the housing repairs account for that year, or cut down its housing programme. These would, in our view, be bad alternatives, but it is impossible to say when such an alternative is so bad as to be ruled out and make "necessary", in the words of the Amendment, an increase either in rents or rates.
I was pleased that my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) made the point in favour of the policy in the Bill and against the Amendments, that we aim in the Bill—and I hope the hon. Member for Ladywood is with us on this—to strike a fair balance between the requirements of the Prices and Incomes policy at any given time—a moderating influence—and the interests of the tenants, on the one hand, and the interests of the rate-payers, on the other.
The Bill gives the Minister discretionary power to control rent increases where


these prima facie, conflict with any given prices and income policy. The Minister must be allowed to use that discretion in relation to all relevant considerations. One of these is the estimated effect of a rent increase on the size of the rate fund contribution. But this should not be an overriding consideration in respect of which he cannot exercise discretion.
The hon. Member for Crosby referred to the Report of the National Board for Prices and Incomes, and I agree that the amount of the estimated rate fund contribution would be relevant. So would the rent increases which the tenants have already had to bear. The report recommended that a rate fund contribution should be made where this made it possible to keep an average rent increase to 7s. 6d. in any year. Moreover, a rate fund contribution made in any year can be repaid to the general rate fund in any of the nine subsequent years.
In nearly all cases a local authority will be able to meet unavoidable increases in costs by an increase in rent averaging not more than 7s. 6d. a week. I thought that my hon. Friend the Member for Aston made a good point here. Looking back on the experience of the majority of local authorities in England, Wales and Scotland this has been borne out by the facts. In that case, the authority will not need to submit a new proposal to the Minister, but in the few cases where my hon. Friend the Member for Aston is wrong, and where the Government feel that on balance there might be merit in a proposal that the increase should be more than that, then it is right that the Minister should be able to consider whether a larger average rent increase is justified. This is the essence of the division between us.
The Amendments are not only defective in drafting, but detract from the whole purpose of the Bill. I would not for a moment belie their importance; they are fundamental Amendments. I understand the intention. I do not rest my case for rejection on their drafting imperfection. I am simply saying that in policy terms they are wrong, and ill founded, and I hope that the House will reject them.

Mr. Allason: The Minister has not dealt with my alternative suggestion that the local authority might seek to let new

dwellings at a substantially higher rent. Will he say what is his policy on that?

Dr. Mabon: I apologise for not answering that point. We favour the idea of rent pooling. I am not sure whether the hon. Gentleman is against the idea that the authority should make a realistic assessment of rents for new houses or whether he is for this. But, on balance, a judgment has to be made on both the present stock of houses and on the new houses being built. It would be totally unfair to throw this entirely on the responsibility of new tenants, existing council tenants or rent payers. A balance must be struck between all the individuals concerned rather than selecting one as opposed to another to bear the cost of the new developments.

[Miss HARVIE ANDERSON in the Chair]

Mr. Charles Mapp: I should like to relate the Amendment, cruel as it is, to the problems of a town faced with difficult problems of clearance of unfit houses. Where there is a great backlog of unfit houses, the Amendment provides for the additional cost of providing new units to fall wholly on the municipal tenants.
I should like to take as an illustration my own town, in which in 1955 nearly half the houses comprised unfit dwellings. At the moment a quarter of the 42,000 houses are unfit. The movers of the Amendment should speak to 40 or 50 other authorities in the country with this acute problem, and should say to them, "The clearance of unfit houses and the rebuilding of your town must be at the expense of your municipal electors."
We in Oldham have about 12,000 municipal houses of which about half are post-war. We have 11,000 houses still to clear, and the Tories have taken a rate of 400 houses a year for clearance as against a figure of towards 1,000 houses which was achieved a year or so ago. This means that the job will be three times as long and also that the problem of clearing those unfit houses in such a town will rest on a quarter of the ratepayers.
Nothing is said in the Amendment about the responsibility of industry in such towns. There are no obligations upon them to help house, or even take


an interest in housing, the people who work for them. Equally, commercial premises in such towns as Oldham have no obligation to be interested in any way in the clearing of unfit property.
My authority is already burdened on the general rate fund at the rate of about 3s. in the £ towards assistance in the housing programme. That on a penny rate, giving £12,000 to £13,000, would mean £40 to £45 per year on each council house on the principle that one should not put any of the cost on the general rate fund.
I make this point to show how cruel and callous is the Amendment before the Committee. It is inhuman to talk from a Tory point of view about clearing unfit houses. Let them talk to the 40 or 50 authorities in the country with such a backlog and then they will realise what should be done.
In Oldham, which in the past has had immense mining problems, all or some of the unfit areas must be cleared before rebuilding can take place. The costs of clearance and of examination of the land to avoid mining subsidence, and the whole of the capital costs involved between the time the first bulldozer goes into the area and the time when the first tenant goes into occupation, have to be taken at interest of nearly 10 per cent. The interim effect on any authority such as that in my area, whose back is already nearly broken by the problem of financing the rebuilding and pulling down of houses, is unbearable.
I hope that the Committee will reject this foolish Amendment. I feel that had it been possible the authority would have taken a 12s. 6d. increase for the municipal tenant to pay. I do not believe that

people expect that these unfit areas should be cleared wholly at the expense of municipal tenants. Although I will resist this Amendment, I hope that the Minister of State will bear in mind the problems of local authorities in regard to unfit dwellings which deserve most serious attention, and I hope some action quite shortly.

Mr. Graham Page: I appreciate the problems mentioned by the hon. Member for Oldham, East (Mr. Mapp), but I think that he has misread the Amendment. The Amendment does not require the deficit on housing revenue account automatically to be paid by the council tenants, and therefore does not necessarily cause hardship to the tenants. The Amendment seeks to leave the local authority to carry out its duties as the elected local government body.
The Minister of State said that the Amendment was too vague. But he appears to have understood it since he said that it was a wrecking Amendment. The meaning is clear, and if any provisos are necessary to stop up any loopholes that is the job of the parliamentary draftsmen. The Amendment as it appears on the Order Paper is sufficient and clear. It is clear that the Government intend ratepayers to pay the whole of the balance of the deficit above the limits set in the Bill and thus will deprive local authorities of their right and duty to strike a balance between the ratepayers and the council tenants. All the Amendment intends is to leave the local authorities with that right. In view of the reply we have received, I hope that my hon. Friends will divide the Committee.

Question put, That the Amendment be made:—

The Committee divided: Ayes 126, Noes 185.

Division No. 15.]
AYES
[8.33 p.m.


Allason, James (Hemel Hempstead)
Carlisle, Mark
Elliot, Capt. Walter (Carshalton)


Atkins, Humphrey (M't'n &amp; M'd'n)
Cary, Sir Robert
Eyre, Reginald


Baker, W. H. K. (Banff)
Chataway, Christopher
Farr, John


Balniel, Lord
Clegg, Walter
Fortescue, Tim


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Cooke, Robert
Foster, Sir John


Biffen, John
Corfield, F. V.
Glover, Sir Douglas


Body, Richard
Costain, A. P.
Gower, Raymond


Boyd-Carpenter, Rt. Hn. John
Craddock, Sir Beresford (Spelthorne)
Grant, Anthony


Boyle, Rt. Hn. Sir Edward
Crowder, F. P.
Griffiths, Eldon (Bury St. Edmunds)


Brewis, John
Cunningham, Sir Knox
Gurden, Harold


Brown, Sir Edward (Bath)
Currie, G. B. H.
Hall-Davis, A. G. F.


Bruce-Gardyne, J.
Dalkeith, Earl of
Hamilton, Michael (Salisbury)


Buchanan-Smith, Alick (Angus, N &amp; M)
Dance, James
Harrison, Brian (Maldon)


Buck, Antony (Colchester)
Dean, Paul
Harrison, Col. Sir Harwood (Eye)


Bullus, Sir Eric
Deedes, Rt. Hn. W. F. (Ashford)
Hawkins, Paul


Campbell, B. (Oldham, W.)
Dodds-Parker, Douglas
Heald, Rt. Hn. Sir Lionel


Campbell, Gordon (Moray &amp; Nairn)
Eden, Sir John
Heseltine, Michael




Higgins, Terence L.
Morgan, Geraint (Denbigh)
Smith, Dudley (W'wick &amp; L'mington)


Hill, J. E, B.
Mott-Radclyffe, Sir Charles
Smith, John (London &amp; W'minster)


Holland, Philip
Munro-Lucas-Tooth, Sir Hugh
Stainton, Keith


Hornby, Richard
Nabarro, Sir Gerald
Stoddart-Scott, Col. Sir M.


Hunt, John
Neave, Airey
Summers, Sir Spencer


Jenkin, Patrick (Woodford)
Nicholls, Sir Harmar
Taylor, Frank (Moss Side)


Jennings, J. C. (Burton)
Nott, John
Temple, John M.


King, Evelyn (Dorset, S.)
Page, Graham (Crosby)
Thatcher, Mrs. Margaret


Lancaster, Col. C. G.
Page, John (Harrow, W.)
Tilney, John


Lane, David
Peel, John
van Straubenzee, W. R.


Legge-Bourke, Sir Harry
Percival, Ian
Vaughan-Morgan, Rt. Hn. Sir John


McAdden, Sir Stephen
Pike, Miss Mervyn
Waddington, David


MacArthur, Ian
Pink, R. Bonner
Walker, Peter (Worcester)


Maclean, Sir Fitzroy
Pounder, Rafton
Walker-Smith, Rt. Hn. Sir Derek


McMaster, Stanley
Prior, J. M. L.
Ward, Christopher (Swindon)


McNair-Wilson, Michael
Pym, Francis
Ward, Dame Irene


Maddan, Martin
Ramsden, Rt. Hn. James
Wells, John (Maidstone)


Maginnis, John E.
Rhys Williams, Sir Brandon
Whitelaw, Rt. Hn. William


Maxwell-Hyslop, R. J.
Rodgers, Sir John (Sevenoaks)
Wiggin, A. W.


Maydon, Lt.-Cmdr. S. L. C.
Rossi, Hugh (Hornsey)
Williams, Donald (Dudley)


Mills, Stratton (Belfast, N.)
Russell, Sir Ronald
Wolrige-Gordon, Patrick


Miscampbell, Norman
St. John-Stevas, Norman
Worsley, Marcus


Mitchell, David (Basingstoke)
Scott-Hopkins, James
Wylie, N. R.


Monro, Hector
Shaw, Michael (Sc'b'gh &amp; Whitby)



Montgomery, Fergus
Silvester, Frederick
TELLERS FOR THE AYES:


More, Jasper
Sinclair, Sir George
Mr. Timotny Kitson and




Mr. Bernard Weatherill.




NOES


Albu, Austen
Finch, Harold
MacColl, James


Allaun, Frank (Salford, E.)
Fitch, Alan (Wigan)
MacDermot, Niall


Alldritt, Walter
Fletcher, Ted (Darlington)
McElhone, Frank


Anderson, Donald
Foot, Michael (Ebbw vale)
McGuire, Michael


Atkins, Ronald (Preston, N.)
Ford, Ben
Mackenzie, Alasdair (Ross &amp; Crom'ty)


Atkinson, Norman (Tottenham)
Forrester, John
Mackenzie, Gregor (Rutherglen)


Bacon, Rt. Hn. Alice
Fowler, Gerry
Mackie, John


Baxter, William
Freeson, Reginald
Maclennan, Robert


Beaney, Alan
Galpern, Sir Myer
McMillan, Tom (Glasgow, C.)


Bence, Cyril
Gardner, Tony
McNamara, J. Kevin


Bennett, James (G'gow, Bridgeton)
Golding, John
MacPherson, Malcolm


Binns, John
Gregory, Arnold
Mahon, Simon (Bootle)


Blackburn, F.
Grey, Charles (Durham)
Mallalieu, E. L. (Brigg)


Boardman, H. (Leigh)
Griffiths, David (Rother Valley)
Mallalieu, J. P. W. (Huddersfield, E.)


Booth, Albert
Griffiths, Eddie (Brightside)
Mapp, Charles


Boston, Terence
Hamilton, James (Bothwell)
Marks, Kenneth


Bottomley, Rt. Hn. Arthur
Hamilton, William (Fife, W.)
Mellish, Rt. Hn. Robert


Boyden, James
Hannan, William
Millan, Bruce


Bradley, Tom
Harrison, Walter (Wakefield)
Miller, Dr. M. S.


Broughton, Sir Alfred
Haseldine, Norman
Milne, Edward (Blyth)


Brown, Hugh D. (G'gow, Provan)
Hazell, Bert
Mitchell, R. C. (S'th'pton, Test)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Hilton, W. S.
Molloy, William


Buchanan, Richard (G'gow, Sp'burn)
Horner, John
Morris, Alfred (Wythenshawe)


Butler, Herbert (Hackney, C.)
Howell, Denis (Small Heath)
Morris, Charles R. (Openshaw)


Butler, Mrs. Joyce (Wood Green)
Howie, W.
Morris, John (Aberavon)


Cant, R. B.
Hoy, Rt. Hn. James
Moyle, Roland


Carmichael, Neil
Huckfield, Leslie
Neal, Harold


Chapman, Donald
Hughes, Roy (Newport)
Newens, Stan


Coleman, Donald
Hunter, Adam
Norwood, Christopher


Concannon, J. D.
Jay, Rt. Hn. Douglas
Ogden, Eric




O'Halloran, Michael


Dalyell, Tam
Jenkins, Hugh (Putney)
Orbach, Maurice


Darling, Rt. Hn. George
Johnson, James (K'ston-on-Hull, W.)
Oswald, Thomas


Davidson, Arthur (Accrington)
Johnston, Russell (Inverness)
Owen, Will (Morpeth)


Davies, Ednyfed Hudson (Conway)
Jones, Dan (Burnley)
Page, Derek (King's Lynn)


Davies, G. Elfed (Rhondda, E.)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Pannell, Rt. Hn. Charles


Davies, S. O. (Merthyr)
Jones, J. Idwal (Wrexham)
Pavitt, Laurence


Dempsey, James
Jones, T. Alec (Rhondda, West)
Pearson, Arthur (Pontypridd)


Dewar, Donald
Judd, Frank
Pentland, Norman


Dickens, James
Kelley, Richard
Perry, Ernest G. (Battersea, S.)


Dobson, Ray
Kerr, Russell (Feltham)
Perry, George H. (Nottingham, S.)


Doig, Peter
Lawler, Wallace
Prentice, Rt. Hn. Reg.


Dunnett, Jack
Lawson, George
Price, Thomas (Westhoughton)


Dunwoody, Mrs. Gwyneth (Exeter)
Leadbitter, Ted
Probert, Arthur


Eadie, Alex
Lee, Rt. Hn. Jennie (Cannock)
Rankin, John


Edwards, Robert (Bilston)
Lee, John (Reading)
Richard, Ivor


Edwards, William (Merioneth)
Lestor, Miss Joan
Roberts, Rt. Hn. Goronwy


English, Michael
Lewis, Ron (Carlisle)
Roberts, Gwilym (Bedfordshire, S)


Ennals, David
Lomas, Kenneth
Robertson, John (Paisley)


Ensor, David
Lubbock, Eric
Ryan, John


Evans, Fred (Caerphilly)
Lyon, Alexander W. (York)
Shaw, Arnold (Ilford, S.)


Evans, Ioan L. (Birm'h'm, Yardley)
Lyons, Edward (Bradford, E.)
Silverman, Julius


Ewing, Mrs. Winifred
Mabon, Dr. J. Dickson
Slater, Joseph


Faulds, Andrew
McBride, Neil
Small, William


Fernyhough, E.
McCann, John
Spriggs, Leslie







Steele, Thomas (Dunbartonshire, W.)
Walker, Harold (Doncaster)
Williams, Clifford (Abertillery)


Swain, Thomas
Watkins, David (Consett)
Willis, Rt. Hn. George


Taverne, Dick
Watkins, Tudor (Brecon &amp; Radnor)
Winnick, David


Thomas, Rt. Hn. George
Weitzman, David
Woodburn, Rt. Hn. A.


Tinn, James
Wellbeloved, James
Woof, Robert


Varley, Eric G,
Wells, William (Walsall, N.)



Wainwright, Edwin (Dearne Valley)
Wilkins, W. A.
TELLERS FOR THE NOES:


Wainwright, Richard (Colne Valley)
Willey, Rt. Hn. Frederick
Mr. Joseph Harper and




Mr. William Hamling.

Mr. Alick Buchanan-Smith: I beg to move Amendment No. 2, in page 2, line 5, after 'to', insert:
'executed or proposed maintenance of or'.
When discussing the last Amendment we said that as a result of the Bill there will be considerable financial pressure on local authorities because of holding down rents. As my hon. Friend the Member for Crosby (Mr. Graham Page) said, for local authorities this creates particular problems in balancing their housing accounts. More specifically, it creates a problem for ratepayers on whom this burden is likely to be placed.
8.45 p.m.
Every local authority will seek one way or another of making economies on account of having to hold down their rents. One way in which they will try to make economies will be on house maintenance. The hon. Member for Birmingham, Ladywood (Mr. Lawler) spoke of authorities looking for economies. I agree with the Minister of State, Scottish Office, that we hope that they are looking for economies all the time. Equally, it must be appreciated that for many local authorities repairs and maintenance can involve large sums.
The hon. Member for Birmingham, Aston (Mr. Julius Silverman) mentioned the high cost of repairs and maintenance for certain types of council houses, particularly older ones. Therefore, if a local authority is looking for economies in one way or another, because it is unable to make a sufficient increase in rent to balance its housing revenue account, economies may be made in house maintenance. This could provide a dangerous temptation for standards of maintenance to be cut.
Subsection (4) makes an exception from rent control for increases in rent that are
attributable to improvements or extensions to the house".
The Amendment seeks to add to this exception an increase in rent attributable

to "executed or proposed maintenance". This is of special importance as regards older local authority houses, because these are the houses where charges for repair and maintenance are likely to be particularly high.
The Amendment is of special importance to tenants of such houses in that it would ensure that their houses are properly maintained.

Mr. Julius Silverman: Can the hon. Gentleman cite any case where the increased cost of repairs amounts to anything like 7s. 6d. per week? The Amendment speaks of "proposed maintenance". Does this mean that it would be possible for a local authority to increase rents because of repairs which had not been carried out but which were proposed?

Mr.Buchanan-Smith: "Proposed maintenance" means exactly what it says. There can be no dispute about the meaning. The hon. Gentleman's first point about the increased cost of repairs would be valid if rents were being increased only on this account, but a local authority must need increased rents for other reasons. There are not only costs of maintenance and repairs. There are costs of borrowing, to give only one example, which rise continually because of the policies of the present Government. It is incorrect to treat an increase of 7s. 6d. a week purely within the bracket of maintenance and repairs. I can think of instances where increased other costs and increased costs of maintenance and repairs will easily amount to more than 7s. 6d a week in any one year.
We move the Amendment, not because we wish to put heavier rents on to tenants, but to safeguard tenants and to ensure that where maintenance and repairs are needed the local authority will not be tempted to skimp and save and thereby not provide a proper service to tenants.

Mr. James Dempsey: I paid the greatest attention to what the hon. Member for North Angus


and Mearns (Mr. Buchanan-Smith) was saying. I was waiting for some evidence of local authorities which are not maintaining houses. It is relevant for the Committee to recall that rents of municipal houses have been increased regularly over the past few years, but in all such cases the increase has been within the purse of the ordinary tenant of municipal houses. In the County of Lanark, where I live, scarcely a year passes but municipal rents are increased, within reason, to a figure which the average tenant can afford to pay. As a result, the houses have always been well maintained.
Indeed, I find in the County of Lanark the converse of the situation described by the hon. Member for North Angus and Mearns. He might be interested to know that not only does the local authority maintain the houses, but it has now started remodelling the old munition houses. A tenant is transferred from an old munition house, the house is remodelled, and in this way these houses are brought up to date. That is what one would call applying a fertile brain towards maintaining the best possible housing conditions in the county. There has never been any danger of houses being neglected there.
I recall some authorities which attempted to get the tenants to meet the cost of certain repairs, but it was discovered that the technicalities of the improvements or maintenance were beyond the capacity of the tenants. Therefore, the local authorities stepped in to ensure that panes of glass were placed in the windows and that the doors would lock, and such other repairs as were essential were done out of the existing housing revenue account.
I am, therefore, amazed to hear of the case mentioned by the hon. Member for North Angus and Mearns when he said that if the rents were increased by 7s. 6d. there would be grave danger of the houses falling into disrepair. I should like the hon. Gentleman to quote one town in Scotland where municipal houses have fallen into disrepair. In the County of Lanark the average increase is 3s. or 3s. 6d. and the county is responsible for all the repairs and maintenance.

Mr. A. P. Costain: Would the hon. Gentleman tell the Committee what is the average cost

of maintenance in Lanarkshire and how much is spent per house?

Mr. Dempsey: I cannot say. I do not have those figures. But I do know that these repairs and maintenance are done out of the housing revenue account. Anybody with any sense of responsibility will expect the general ratepayer to contribute to the council housing account. [An HON. MEMBER: "Why?"] Because otherwise the rents would become so extortionate that many of the applicants would be chased back to the old but-and-bens, back to the single ends, as we used to call them, and young married couples would be compelled to go into rooms. When hon. Members opposite ask, "Why?", I am suspicious that some of them would be in favour of that sort of thing happening.
Striking a balance is not easy, but I have never known a municipal housing account to be balanced without contributions from the general ratepayers. Who is the general ratepayer? He is the person who, in due course, will qualify for a council house himself and he will get the benefit of the contributions to the housing account. [Laughter.] Some hon. Members opposite think that this is a laughing matter. It is a tragedy that some hon. Members opposite have not had to live in the types of houses which I have seen and, indeed, in which I myself have lived. I lived in a single end.
I was happy to get it when I was married; it was what we call a single end. Obviously, that is foreign language to hon. Members opposite. They probably lived in mansion houses. I never have, and I can speak, therefore, with some human experience of a human problem, a problem which is absolutely foreign to their way of life.
The laughter and derision of the Opposition tonight shows that there are two worlds, and their world is very different from mine. In my world, houses should be built to up-to-date standards, properly maintained, and be let at rents which people can afford to pay. It is as simple as that. To that end, I hope that the Amendment will be rejected. The Opposition's proposal is that, if rents are not increased beyond 7s. 6d., the repair and maintenance of municipal houses will suffer and they will fall into neglect. That is the sort of propaganda which we have


had from the Front Bench opposite, without a shred of evidence to justify it.
Our case is a good one, and I am sure that the Government will reject the Amendment.

Mr. Allason: I am not sure whether the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) heard the Minister's winding-up speech on the last Amendment. It appears that he did not, since he said that housing repair accounts have always been flourishing and that repairs are always carried out.

Mr. Dempsey: Yes.

Mr. Allason: But the Minister has been advising councils that they must look forward to see how they can meet a deficit. We are speaking here of a deficit, and he suggested that the housing repairs account is a suitable account to dip into to try to balance the budget.

Mr. Dempsey: There has always been a deficit in most municipal housing accounts. That has been so in all those of which I have had experience. I was arguing that there would always be one, and, therefore, striking a fair rent could be a difficult problem.

Mr. Allason: The hon. Gentleman is muddling up a deficit and a contribution from the rate fund. I agree that there is a contribution from the rate fund, but, normally, housing repair accounts remain in credit. It is only sensible that they should, and carry forward a substantial credit from year to year. But the Minister says, "Let us dip into that credit and run down the housing repairs account to nothing". That is a false economy.

Dr. Dickson Mabon: I did not say that.

Mr. Allason: As my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) said, costs are rising all the time. It is not now a matter of trying to cut down the housing repairs account. It is a matter of building it up. One does not carry out a continual stream of repairs, regularly balanced year by year. Very often, a local authority will prefer to do its painting in one year, perhaps one year in seven, and in that case there may well be in the near future a heavy drain on the account.
I understand much better the objection of the hon. Member for Birmingham, Aston (Mr. Julius Silverman). He fears that the Amendment will be an excuse for saying that, as a particular house—

The Temporary Chairman (Miss Harvie Anderson): Order. I hope that the hon. Gentleman will not try the Chair too far. We seem to be straying backwards a little, which would not be correct procedure.

Mr. Allason: I am sorry, Miss Harvie Anderson. I was speaking of the interjection by the hon. Member for Aston on this Amendment, not of his speech on the previous occasion. He fears that the Amendment would be used as an excuse for increasing rents because a particular house needed repairs. I see that, but I do not think that that is the purpose of the Amendment, which is to meet the Minister's very point. When he says that the repairs account should be dipped into, we say that it should not, that if it is to be run down it should be possible to replenish it by an increase in rents. I think that it means no more than that.
Housing repairs are essential. It is crazy to suggest that now is the time to economise on maintenance. We all know that if we economise on maintenance one year we have twice the expense the following year. It is very silly to allow slates not to be replaced and not to do various things, to the great annoyance of the tenant and the destruction of the building. I believe that what the Minister proposes is wrong, and, therefore, the Amendment is necessary.

9.0 p.m.

Mr. R. C. Mitchell: I listened with great interest to the speeches of the hon. Members for North Angus and Mearns Mr.Buchanan-Smith) and Hemel Hempstead (Mr. Allason). I agree with much that they said, in that we should not allow our repairs accounts to run down and should not economise on maintenance. But would they kindly send copies of their speeches to the Chairman of the Southampton Housing Committee, who is a Conservative, my opponent at the next General Election?
The Conservative-controlled Southampton Housing Committee, as a deliberate


act of policy—nothing to do with a 7s. 6d. or 10s. a week rent increase—has deliberately cut down on repairs over the past year. It has been slashing repair accounts, and so on. Since the Conservatives took over they have done exactly what hon. Members opposite said they should not do.

Mr. Norman Atkinson: I enter the debate merely to ask for clarification of the arithmetic used, which is somewhat confusing. It was suggested that local authorities would skimp the maintenance of their houses if they were ruthlessly held to a 7s. 6d. rent increase. That seems to be the general burden of the argument. It is somewhat confusing to me, particularly after listening to one hon. Member opposite develop the argument a little further. I take it that the Opposition are also saying that the increases allowed in the Bill should be 12s. 6d. and 15s., as advocated on the Amendment Paper, and that that is official Conservative policy.
If logic is not strained too far, I also take it that if the figures were 12s. 6d. and 15s. the Bill would be acceptable to the Opposition. That is the logic of the Amendment. If so, are we arguing that the houses would be properly maintained if the figures were 12s. 6d. and 15s., a difference of 7s. 6d. as compared with the sums discussed tonight? I assume that we can quantify the matter in this way. It is unfair for Conservative hon. Members to condemn the arithmetic of the Greater London Council for instance—

Mr. Costain: Can the hon. Gentleman say where the 12s. 6d. and 15s. appear?

Mr. Atkinson: Amendment No. 12, under the names of Mr. Peter Walker, Mr. Graham Page and Mr. Christopher Chataway, says that the sums of 12s. 6d. and 15s. should be inserted in the Bill. If they are serious—

The Temporary Chairman (Miss Harvie Anderson): I think the hon. Gentleman must have made an error in quoting an Amendment which has not been called. We are discussing a proposition made in Amendment No. 2.

Mr. Atkinson: I accept that, Miss Harvie Anderson, but the only way in which we can elicit information is to

quote figures in the documents before us or in other documents, where it is plainly stated that if those sums of 12s. 6d. and 15s. were inserted the Bill would be acceptable to the Opposition.
The conclusion I draw from this is that the Opposition are condemning the leadership of the G.L.C. for asking for anything up to 38s. per week in order adequately to maintain its properties. The Opposition are saying here that the G.L.C. is incompetent and has no knowledge of the cost of maintenance or of its own housing problems, and that the astronomical increases it has recommended do not represent reality. In effect, they are saying to the G.L.C, "You were wrong in your original assumption in asking for astronomical increases in London rents, and London authorities should be restrained to the levels of 12s. 6d. and 15s. per week."
The Opposition are arguing, presumably, that, if these figures were applicable to London, they meet the need as far as the housing revenue account is concerned. I think it improper for them to come here with these well-thought-out figures condemning the Conservative leadership of the G.L.C.

Mr. Christopher Chataway: Since the hon. Gentleman's observations are based on a misconception perhaps I may explain the situation to him. We made it clear on Second Reading that we are opposed in principle to the control of rents by the central Government and that we believe it should rest with the local authorities. Equally, it has been made clear that we believe that the G.L.C. is behaving entirely reasonably in basing its rents in the long term upon a fair rents principle and that to move by gradual stages over three years to a fair rents principle is a reasonable objective. So there is no question of this or any subsequent Amendment being construed as a criticism of the policy followed by the G.L.C.

The Temporary Chairman: Order. The debate is ranging considerably wider than the scope of Amendment No. 2 and I hope that we can now return to its narrower terms.

Mr. Atkinson: I accept that, Miss Harvie Anderson. What the Opposition are now saying is that their Amendments


are a frivolous exercise and were never intended to be serious. We either accept the seriousness of their case on Second Reading or the seriousness of their Amendments. It is either one or the other. We either accept the seriousness of the figures provided for us by the G.L.C. or accept these well-thought-out figures of 12s. 6d. and 15s.
The Opposition seem now to be saying that there should be a ceiling on rents throughout the country. But if, on Second Reading, they said that this should be left entirely to the local authorities concerned, do I take it that they mean that here should be no ceiling whatever on rents and that the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) was wrong in suggesting that some amount should be made available in order that there may be effective repairs of the property?

Mr. Lawler: I was interested to hear from the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) of the excellent state of maintenance of public sector houses in his area. He gave the example of the council moving out one tenant, improving the property and putting another tenant in, and so on. This is being done on a wide scale and perhaps helps to answer the point raised in the Amendment, which is certainly applicable to it, that such action by a local authority will be outside the scope of the Bill in relation to the new rents it will be allowed to impose and will, therefore, give it an enhanced income to help maintain its houses. The letting of properties which had been made vacant for improvements would rank as a new letting.
I find it difficult to follow what is meant by "proposed maintenance". It has been rightly said that many prudent local authorities undertake extensive maintenance operations once every five, six or seven years and each year they allow out of their repairs account a sum of money to meet that ultimate expense. In the example of the Midlands authority with which I am connected this sum is £22 a year per dwelling. It would seem to be prudent for housing revenue accounts and repairs accounts, which go together in their implications in this subject, to be allowed to retain this money to carry out repairs which are guaranteed

in stages and which, for at any rate large authorities, would be for large groups of tenants in the public sector.
I take it that in requiring further information to be furnished to him when any application is made for such increases the Minister would take this factor into consideration to see whether there were sufficient reserves created to allow for delayed periodical expenditure in any one, or two or three consecutive years. But can the Committee be given further information about the term "proposed maintenance"? It is accepted that it is the duty of local authorities to keep all houses in the public sector in a good state of maintenance and they make provision to do so, but what additional financial expenditure is expected to justify the terms of the Amendment?

Mr. Albert Booth: You rightly indicated to us, Miss Harvie Anderson, that the terms of the Amendment were narrow, but within those narrow terms an important issue is at stake. If the Amendment were carried, it would run against the whole purpose of the Bill, which is to control rent increases and to do so in specific terms. The Bill relates a rent increase to the expenditure which local authorities spend on administration and interest charges and to increases attributable to maintenance works carried out, but the Amendment proposes to extend the level of rent increases to cover maintenance which it is proposed to carry out.
For a number of local authorities this would be a serious factor. We have reached a stage in the public ownership of housing by local authorities when many municipal houses are due for major maintenance work, one might almost say a major overhaul. This results from the need not only to repair the houses to their original standard, but to bring them up to standards acceptable in modern housing conditions, the desirable standards which local authorities have set them selves.
In these circumstances, local authorities are examining their older council houses and reviewing the work which will have to be undertaken to bring them up to those desirable standards, and their costing clerks are working out the cost, which for many of the older houses will be considerable, perhaps as high as between


£200 and £400 per house. If the Amendment were carried, local authorities could impose considerable increases of rent in advance of carrying out extensive work of that nature.
9.15 p.m.
I wonder whether the proposers of the Amendment are serious. Would they grant to anyone who had the power, normally controlled by legislation, the right to increase charges on a proposal stating that at some undefined date in the future some requirement would be carried out, which is not even defined by Statute? Proposed maintenance could mean that it is proposed to be done in three years hence. Even the specific obligation to maintain in practical terms is not defined. It runs counter to the intentions of the Bill. Although it is not as narrowly drawn as I would wish, the Bill allows certain increases in respect of maintenance, and I hope the Committee will reject the Amendment.

Mr. Costain: The speech by the hon. Member for Barrow-in-Furness (Mr. Booth) has really let the cat out of the bag. The question before the Committee is: is it the duty of any local authority to burden the general ratepayers with the extra costs of maintaining houses or should, as hon. Members opposite say, a local authority neglect the maintenance of a house? Those are the alternatives. The hon. Member has suggested that the Bill is designed to keep down basic rents. We on this side know the reason for the Bill, the Government hope to get some votes from the tenants of council houses. I hope that every ratepayer reads that speech and appreciates what is behind that legislation.

Mr. R. B. Cant: May I make a constructive suggestion—that hon. Members opposite pay a visit to Stoke-on-Trent, in which my constituency lies? We have never skimped on repairs there. We have increased the amount allocated to repairs but we have not increased the rent of council houses for the past five years.

Mr. R. W. Brown: The hon. Member for Folkestone and Hythe (Mr. Costain) has not mentioned that since 1968 many Conservative councils have deliberately divested themselves of maintenance

responsibility. They have put the whole onus for inside maintenance of the house upon the tenant. Yet they have still increased the rent. They have behaved in the most abominable fashion. The attitude of the G.L.C. over the past two years has been deplorable. Any London Member can tell the hon. Member how difficult it is to get the G.L.C. to carry out necessary work of ordinary maintenance, such as dampness. It refused to do this, even though it has increased the rents.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Reginald Freeson): If this debate has gone rather wide of the terms of the Amendment it is largely due, I am afraid, to the rather imprecise way in which the Amendment is worded and the way in which it has been argued. To some extent I suspect that it is due to some misunderstanding on the part of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) of the way in which local authorities operate their repairs policies and manage their housing repairs funds.
I am confirmed in that view by the rather inadequate contribution of the hon. Member for Folkestone and Hythe (Mr. Costain). He made no mention of the housing repairs fund. When we are talking about annual expenditure on maintenance of housing estates by local authorities we are talking about sums of money being drawn from a fund, and not about a current contribution being spent on an equivalent basis. There is money going into a fund, and over five- or seven-year cycles it is being withdrawn and spent on repairs. Anything done this year or next is based upon contributions built up over a period of years.
In that connection, the point made by my hon. Friend the Member for Shoreditch and Finsbury (Mr. R. W. Brown) is valid, because some authorities—I hope that they will not pursue the policy too far—have cut back their responsibilities for maintenance, although money has been provided over previous years to enable that maintenance to be carried out in this year or next year.
The Amendment refers to annual increases of rent being related to past or prospective increases in the cost of maintenance and in so doing it shows a basic


misunderstanding of how local authorities finance the maintenance of their houses. It has been suggested that the Bill could be damaging to the prospect of major works on some of the older estates, and that comment led other hon. Members to go wider in criticism of the Bill. But the Bill explicitly separates the issue of modernisation and improvement of some of the very old, immediately post-First World War, council estates from the issue of rent control of any kind. There have been many instances over the years in which local authorities have applied, as private owners have applied, for grants under the relevant Acts, and that number will be largely increased under the 1969 Act, which became law a few months ago.
It is as well also to point out, in spite of what has been said about repairs funds being run down into the ground, that during the operation of the prices and incomes policy most local authorities have not found it necessary to propose increases larger than the 7s. 6d. which we are giving as a guide line.

Mr. Allason: If the hon. Member had listened to the speech of the Minister in the last debate he would have heard him refer specifically to the running down of housing repairs funds.

Mr. Freeson: The hon. Member must re-read that speech.

Mr. Allason: No. The Parliamentary Secretary must re-read it.

Mr. Freeson: I happen to know a little more about the operation of housing repairs funds than does the hon. Member.
As was suggested in the report of the National Board for Prices and Incomes, where substantial balances—I am not referring to current contribution levels—have been built up by local authorities in the administration of their housing departments, we have said that these should be looked at, but it has been the Government's policy while this control has been operated not to take account of working balances, which is the money with which we are mainly concerned in managing housing repairs funds. There is no instance in which we have said to a local authority that it must cut back its working balances—the figures on which the five- or seven-year cycle of works is

carried out—so as to destroy those balances in order to maintain a lower rent level. Not one hon. Member opposite has produced evidence to show that we have made such a request upon the G.L.C. or upon anyone else.
I stress that the rent control policies being pursued must take account of all the factors. To single out one factor such as maintenance costs over the past and the future—in the terms of the Amendment, the indefinite past and the indefinite future—would be pointless, because any rent increases and any review of rent policy should relate to a whole series of factors which give rise to the cost of managing housing estates.
It is no more right to single out the factor suggested in the Amendment than to single out any other factor and to say that it should be excluded from the consideration of rent control. The reasoning behind the Amendment is unsound, though I willingly accept the motivation which led some hon. Members to be concerned that we should not so conduct our affairs in Government or local government as to destroy the sound management of housing repairs funds. I happen to believe that this is a very important part of local government management in the running of housing estates. I certainly would not be a party to their destruction. It is not the policy of the Government or the purpose of the Bill so to do.

Mr. Peter Walker: For a Parliamentary Secretary who boasts of his superior knowledge in these matters, that was a remarkably bad and incompetent speech. We are told that the trouble with the Amendment is that it is indefinite both as to the past and as to the future. If the hon. Gentleman looks at the Bill, he will see that subsection (4) of the Clause, dealing with improvements, is also indefinite as to the past and as to the future.
If the hon. Gentleman understood the Amendment or bothered to read it, he would realise that all that it tries to do is to add to the question of improvements the question of maintenance and repair. This is something that the Government should have done. Therefore, the hon. Gentleman's complaint that the Amendment is indefinite is a valid complaint against the wording of subsection (4).
We have been given the remarkable argument that it is the normal practice of local authorities to fund their repairs account year by year and that we should, therefore, take no notice of what might happen. Let us look, however, at the types of increase to which the repairs accounts will be subjected. Those who originally decided the basis of funding maintenance and repairs accounts could not have known that the Government would introduce the selective employment tax, with all its impact—and the recent changes in that tax have had a further impact. Similarly, nobody operating the funding of such accounts could have taken into consideration the suggested pay award for the building industry involving a 26 per cent. increase in the period to 1971. Here are simply two factors which have a considerable impact upon the cost of maintenance and repairs.
It is remarkable that none of the arguments from the back benches opposite showed any recognition of what the Amendment seeks to do. It merely tries to say that in the same way as one takes into account the cost of improvements—and they are excluded by subsection (4)—one should also take into account the additional cost of maintenance.
If the Government go into the Lobby against the Amendment, they will be saying that they are in favour of improvements not being taken into account. That was the point which was raised with some concern by the hon. Member for Barrow-in-Furness (Mr. Booth). If he looks at subsection (4), he will find that the point to which he referred is Government policy. Therefore, the hon. Member had better vote against the Bill. We say that maintenance and repairs should be taken into a calculation in exactly the same way as the Government suggest that improvements should be taken into account.

Mr. Booth: The point that I was making—I apologise if I did not make it clearly—was that in maintaining very old houses there is inevitably an element of improvement because they are not repaired to the original standard. Therefore, in those improvements, maintenance grants would not be involved.

Mr. Walker: I am grateful to the hon. Member for reinforcing my argument still further.
The Government are saying in subsection (4) of the Clause that
An increase in the rent for a house is excepted from the provisions of this section if it is attributable to improvements".
We say that to that should be added maintenance as well. In the terms of his argument, therefore, the hon. Member for Barrow-in-Furness is at one with us and we look forward to seeing him in the Lobby with us.
We are suggesting that the increased costs of both repairs and improvements should be taken into consideration. The Government have done more to increase the costs of both repairs and improvements than any Government in history. Therefore, in the light of the Government's record, this is a reasonable Amendment for them to accept.

[Mr. HARRY GOURLAY in the Chair]

9.30 p.m.

As to the points made by the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) about the importance of rate support to rents, and how important it is to keep rents low rather than to put them up, I gathered that in Coatbridge there is a deficit on housing account on which the subsidy by the ratepayers is considerable. If that is his principle and policy, I accept that.

Mr. Dempsey: I said that I believed in a fair rent, but it is difficult to have a fair rent when there is a rent contribution to the housing account. I would remind the hon. Member that only this year my local authority increased rents by 5s. a week, the other authority by 4s. 6d. a week.

Mr. Walker: If the hon. Member means by fair rent the definition by his own Government of fair rent, we welcome him as a convert to our cause and are delighted to have him on our side. We accept "fair rent" as defined by the Labour Government in the Rent Act, and we say that those who cannot afford it should receive a rebate to meet their problem. If the hon. Member is a convert, then we have two converts, the hon. Member for Barrow-in-Furness and the hon. Member for Coatbridge and Airdrie, and we shall welcome them in our Division Lobby, and, perhaps, with the assistance of those two—

Mr. Atkinson: I should not like the hon. Member to finish his speech without defining his own point of view. Does he honestly believe that there should be a maximum figure for these increases, or that the figure should be left free and no limit mentioned? Which is it?

Mr. Walker: I make it perfectly clear that I accept the Labour Government's definition of a fair rent. I am all in favour of having fair rents applied in both the public and the private sector, and all in favour of seeing that those who cannot afford the rents receive an appropriate rebate.That is my policy.As

for these increases, for those families who cannot afford to meet the fair rent I am in favour of a proper rebate. That is the policy of this side of the Committee, and I hope that it will eventually —after years of persuasion—become the policy of that side of the Committee so that we shall have more than two converts. Meanwhile, we shall divide the Committee.

Question put, That the Amendment be made: —

The Committee divided: Ayes 131, Noes 192.

Division No. 16.]
AYES
[9.33 p.m.


Allason, James (Hemel Hempstead)
Hall-Davis, A. G. F.
Percival, Ian


Atkins, Humphrey (M't'n &amp; M'd'n)
Hamilton, Michael (Salisbury)
Pike, Miss Mervyn


Baker, W. H. K. (Banff)
Harrison, Brian (Maldon)
Pink, R. Bonner


Balniel, Lord
Harrison, Col. Sir Harwood (Eye)
Pounder, Rafton


Bennett, Dr. Reginald (Cos. &amp; Fhm)
Hastings, Stephen
Prior, J. M. L.


Biffen, John
Hawkins, Paul
Pym, Francis


Boardman, Tom (Leicester, S.W.)
Heald, Rt. Hn. Sir Lionel
Ramsden, Rt. Hn. James


Body, Richard
Heseltine, Michael
Rhys Williams, Sir Brandon


Boyd-Carpenter, Rt. Hn. John
Higgins, Terence L.
Rodgers, Sir John (Sevenoaks)


Boyle, Rt. Hn. Sir Edward
Hill, J. E. B.
Rossi, Hugh (Hornsey)


Brewis, John
Hogg, Rt. Hn. Quintin
Russell, Sir Ronald


Brown, Sir Edward (Bath)
Holland, Philip
St. John-Stevas, Norman


Bruce-Gardyne, J.
Hornby, Richard
Scott-Hopkins, James


Buchanan-Smith, Alick(Angus, N&amp;M)
Hunt, John
Shaw, Michael (Sc'b'gh &amp; Whitby)


Buck, Antony (Colchester)
Jenkin, Patrick (Woodford)
Silvester, Frederick


Bullus, Sir Eric
Jennings, J. C. (Burton)
Sinclair, Sir George


Campbell, B. (Oldham, w.)
King, Evelyn (Dorset, S.)
Smith, Dudley (W'wick&amp; L'mington)


Campbell, Gordon (Moray &amp; Nairn)
Kitson, Timothy
Smith, John (London &amp; W'minster)


Carlisle, Mark
Lancaster, Col. C. G.
Stainton, Keith


Cary, Sir Robert
Lane, David
Stoddart-Scott, Col. Sir M.


Chataway, Christopher
Legge-Bourke, Sir Harry
Summers, Sir Spencer


Clegg, Walter
MacArthur, Ian
Taylor, Frank (Moss Side)


Cooke, Robert
Maclean, Sir Fitzroy
Temple, John M.


Corfield, F. V.
McMaster, Stanley
Thatcher, Mrs. Margaret


Costain, A. P
McNair-Wilson, Michael
Tilney, John


Craddock, Sir Beresford (Spelthorne)
Maddan, Martin
van Straubenzee, W. R.


Crowder, F. P.
Maginnis, John E.
Vaughan-Morgan, Rt. Hn. Sir John


Cunningham, Sir Knox
Mawby, Ray
Waddington, David


Currie, G. B. H.
Maxwell-Hyslop, R. J.
Walker, Peter (Woroester)


Dalkeith, Earl of
Maydon, Lt.-Cmdr. S. L. C.
Walker-Smith, Rt. Hn. Sir Derek


Dance, James
Mills, Stratton (Belfast, N.)
Ward, Christopher (Swindon)


Dean, Paul
Miscampbell, Norman
Ward, Dame Irene


Deedes, Rt. Hn. W. F. (Ashford)
Mitchell, David (Basingstoke)
Weatherill, Bernard


Dodds-Parker, Douglas
Monro, Hector
Wells, John (Maidstone)


Eden, Sir John
Montgomery, Fergus
Whitelaw, Rt. Hn. William


Elliot, Capt. Walter (Carshalton)
Morgan, Geraint (Denbigh)
Wiggin, A. W.


Eyre, Reginald
Mott-Radclyffe, Sir Charles
Williams, Donald (Dudley)


Farr, John
Munro-Lucas-Tooth, Sir Hugh
Wolrige-Gordon, Patrick


Fortescue, Tim
Nabarro, Sir Gerald
Worsley, Marcus


Foster, Sir John
Neave, Airey
Wylie, N. R.


Clover, Sir Douglas
Nicholls, Sir Harmar



Cower, Raymond
Nott, John
TELLERS FOR THE AYES:


Grant-Ferris, Sir Robert
Page, Graham (Crosby)
Mr. Jasper More ard


Griffiths, Eldon (Bury St. Edmunds)
Page, John (Harrow, W.)
Mr. Anthony Grart


Gurden, Harold
Peel, John





NOES


Albu, Austen
Bennett, James (G'gow, Bridgeton)
Broughton, Sir Alfred


Allaun, Frank (Salford, E.)
Binns, John
Brown, Hugh D. (G'gow, Provan)


Alldritt, Walter
Blackburn, F.
Brown,Bob(N'c'tle-upon-Tyne,W.)


Anderson, Donald
Blenkinsop, Arthur
Brown, R. W. (Shoreditch &amp; F'bury)


Atkins, Ronald (Preston, N.)
Boardman, H. (Leigh)
Buchanan, Richard (G'gow, Sp'burn)


Atkinson, Norman (Tottenham)
Booth, Albert
Butler, Herbert (Hackney, C.)


Bacon, Rt. Hn. Alice
Boston, Terence
Butler, Mrs. Joyce (Wood Green)


Baiter, William
Bottomley, Rt. Hn. Arthur
Cant, R. B.


Beaney, Alan
Boyden, James
Carmichael, Neil


Bence, Cyril
Bradley, Tom
Carter-Jones, Lewis




Chapman, Donald
Hughes, Roy (Newport)
Newens, Stan


Coleman, Donald
Hunter, Adam
Norwood, Christopher


Concannon, J. D.
Jay, Rt. Hn. Douglas
Oakes, Gordon


Conlan, Bernard
Jenkins, Hugh (Putney)
O'Halloran, Michael


Da yell, Tarn
Johnson, James (K'ston-on-Hull, W.)
Orbach, Maurice


Darling, Rt. Hn. George
Johnston, Russell (Inverness)
Oswald, Thomas


Davidson, Arthur (Accrington)
Jones, Dan (Burnley)
Owen, Will (Morpeth)


Davies, Ednyfed Hudson (Conway)
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Page, Derek (King's Lynn)


Dailies, G. Elfed (Rhondda, E.)
Jones, J. Idwal (Wrexham)
Pannell, Rt. Hn. Charles


Davies, S. O. (Merthyr)
Jones, T. Alec (Rhondda, West)
Park, Trevor


Dempsey, James
Judd, Frank
Pavitt, Laurence


Dewar, Donald
Kelley, Richard
Pearson, Arthur (Pontypridd)


Dickens, James
Kerr, Russell (Feltham)
Pentland, Norman


Dobson, Flay
Lawler, Wallace
Perry, Ernest G. (Battersea, S.)


Doig, Peter
Lawson George
Perry, George H. (Nottingham, s.)


Dunnett, Jack

Prentice, Rt. Hn. Reg.


Dunwoody, Mrs, Gwyneth (Exeter)
Leadbitter, Ted
Price, Thomas (Westhoughton)


Eadie, Alex
Lee, Rt. Hn. Jennie (Cannock)
Probert, Arthur


Edwards, Robert (Bilston)
Lee, John (Reading)
Rankin, John


Edwards, William (Merioneth)
Lestor, Miss Joan
Richard, Ivor


English, Michael
Lewis, Arthur (W. Ham, N.)
Roberts, Albert (Normanton)


Ennals, David
Lewis, Ron (Carlisle)
Roberts, Rt. Hn. Goronwy


Ensor, David
Lubbock, Eric
Roberts, Gwilym (Bedfordshire, S.)


Evans, Fred (Caerphilly)
Lyon, Alexander W. (York)
Robertson, John (Paisley)


Evans, loan L. (Birm'h'm, Yardley)
Lyons, Edward (Bradford, E.)
Ross, Rt. Hn. William


Ewing, Mrs. Winifred
Mabon, Dr. J. Dickson
Ryan, John


Faulds, Andrew
McBride, Neil
Shaw, Arnold (llford, S.)


Fernyhough, E.
McCann, John
Silverman, Julius


Finch, Harold
MacColl, James
Small, William


Fitch, Alan (Wigan)
MacDermot, Niall
Spriggs, Leslie


Fletcher, Raymond (Ilkeston)
McElhone, Frank
Steele, Thomas (Dunbartonshire, W.)


Fletcher, Ted (Darlington)
McGuire, Michael
Swain, Thomas


Foot, Michael (Ebbw Vale)
Mackenzie,Alasdair(Ross&amp;Crom'ty)
Taverne, Dick


Forrester, John
Mackenzie, Gregor (Rutherglen)
Thomas, Rt. Hn. George


Fowler, Gerry
Mackie, John
Tinn, James


Freeson, Reginald
Maclennan, Robert
Varley, Eric G.


Galpern, Sir Myer
McMillan, Tom (Glasgow, C.)
Wainwright, Edwin (Dearne Valley)


Gardner, Tony
McNamara, J. Kevin
Wainwright, Richard (Colne Valley)


Golding, John
MacPherson, Malcolm
Walker, Harold (Doncaster)


Gregory, Arnold
Mahon, Simon (Bootle)
Watkins, David (Consett)


Grey, Charles (Durham)
Mallalieu, E. L. (Brigg)
Watkins, Tudor (Brecon &amp; Radnor)


Griffiths, Eddie (Brightside)
Malialieu,J.P.W.(Huddersfield,E.)
Weitzman, David


Hamilton, James (Bothwell)
Mapp, Charles
Wellbeloved, James


Hamilton, William (Fife, W.)
Marks, Kenneth
Wells, William (Walsall, N.)


Hamling, William
Mason, Rt. Hn. Roy
Wilkins, W. A.


Hannan, William
Mellish, Rt. Hn. Robert
Wiliey, Rt. Hn. Frederick


Harrison, Walter (Wakefield)
Miliar], Bruce
Williams, Clifford (Abertillery)


Haseldine, Norman
Miller, Dr. M. S.
Willis, Rt. Hn. George


Hazell, Bert
Milne, Edward (Blyth)
Winnick, David


Henig, Stanley
Mitchell, R. C. (S'th'pton, Test)
Woodburn, Rt. Hn. A.


Hilton, W. S.
Molloy, William
Woof, Robert


Homer, John
Morris, Alfred (Wythenshawe)



Howell, Denis (Small Heath)
Morris, Charles R. (Openshaw)
TELLERS FOR THE NOES:


Howie, W.
Morris, John (Aberavon)
Mr. Ernest Armstrong and


Hoy, Rt. Hn. James
Moyle, Roland
Mr. Joseph Harper.


Huckfield, Leslie
Neal, Harold

Clause 1 ordered to stand part of the Bill.

Clause 2

LIMITS OF UNRESTRICTED INCREASES

Question proposed, That the Clause stand part of the Bill.

Mr. chataway: Clause 2 sets the limits for average increases and maximum increases for each local authority. It is this part of the Bill which pre-eminently perpetuates a situation in which subsidies are paid alike to those who need them and those who do not. This is the Clause which principally will perpetuate a situation in which people are worse

off will be subsidising those who are better off than they are. This is the feature of the Bill to which we object most strongly.
It was suggested earlier by the hon. Member for Tottenham (Mr. Atkinson) that we on this side would be happier with the Bill if a higher limit were set. This is not the case. We believe that local authorities should have the freedom to determine their own rents. As we understand it, that is the policy of the Government. They believe that in the long term local authorities should have this freedom restored to them.
Perhaps hon. Gentlemen opposite will consider one or two of the consequences of the Clause. It was admitted by the Minister of State, Scottish Office, earlier


that there are a number or alternatives if a local authority does not want to put up rents. He said that in his view they were bad alternatives. A local authority could either defer repairs or else cut down on new housing. He said that although they were bad alternatives, perhaps they were not so bad as to be ruled out in all cases.

Dr. Dickson Mabon: Dr. Dickson Mabon indicated dissent.

Mr. Chataway: I apologise if the Minister of State did not say that. That was the implication of his remarks as I understood them.
The undoubted effect of the Government's policy is to deter new council building. We are so used to the Government so often achieving the opposite from what they intend, but in a case such as this, if local authorities see the burden increasing on the ratepayer as a result of Government policy, they must be deterred from new council building. I hope that in view of the figures from the Ministry of Public Building and Works yesterday, showing that the value of public sector housing orders fell back by 26 per cent. during the first nine months of this year, the Government will have second thoughts about their policy.
9.45 p.m.
When The Times states that a joint N.E.D.C. report forecasts that the value of output in public housing, calculated on constant prices, will fall by 4½ per cent. in 1969, by a further 1 per cent. in both 1970 and 1971 and by a full 6 per cent. in 1972, hon. Members opposite should stop and think about the consequences of the policy they are pursuing; and realise that unless local authorities are allowed so to increase rents as to contain the burden upon the ratepayer some fall in new housing is bound to result.
Without wishing to detain the Committee, I wish to make a further point relating specifically to the Greater London Council, since that body has been mentioned by a number of hon. Members. Some local authorities will be able to achieve a perfectly satisfactory state of affairs within modest increases in rent —their predecessors over the years will, perhaps, have pursued a rent policy fair both to tenant and ratepayer. This is has not been the situation in London.
In 1964, the district auditor had to draw the attention of the L.C.C. to the fact that its rents ought from time to time to be related to rents in the private sector, and chided the L.C.C. for failing to review its rents at regular intervals. That is the background against which the G.L.C. has had to operate. In that situation, it is facing an undesirable restriction to an average rent increase of 7s. 6d., and a maximum of 10s., as the Clause lays down.
In an article in Housing last September, Mr. Macey, the G.L.C. Director of Housing, who has served both parties with considerable distinction, drew attention to the particularly undesirable limitation imposed by this 10s. maximum. He said:
… with a maximum of 10s. the gap here between the average and the maximum is too narrow and must be a handicap to the practical aplication of increases over the whole range of sizes of dwellings and types of dwellings owned by local authorities. It would be much more practical to say that the average of 7s. 6d. should be set against a maximum of 12s. 6d.
That example of an authoritative view shows the kind of distortions and anomalies that are produced by a Clause of this kind. I therefore hope that the Committee will recognise that we on this side view the terms of the Clause with the gravest misgivings.

Mr. Freeson: The hon. Member for Chichester (Mr. Chataway) made a number of observations about the position of the housing programme and its prospects, but he must know that the Bill relates to the rents of existing properties and therefore has no relationship —[Interruption.]—It might be helpful if hon. Members were to listen to points before commenting on them—to the housing programmes as such, nationally, because he knows, as I know, that they are not subject to the figures written into the Bill.
I will go further. No evidence has been brought to show that it has been the policy operated so far under the Prices and Incomes Act, and now proposed under the Bill, that has caused any slow down in the whole housing programme in the public sector. Other financial difficulties have been quoted in discussion and in public, but not this difficulty, although there has been a general objection to the restraints that have been imposed.
These restraints have been imposed in this Bill as part of the general economic position, not just on the basis of considering the position of local authorities and their housing estates as such. It is not only in this part of the economy that we have sought to apply restraints of one kind or another in prices and incomes policy. To single out this part as one which should not be treated as other fields of policy are treated would be grossly unfair bearing in mind the important part which rent levels plays in the economy of the country.
I resist the temptation to make a comment on the cut-back by local authorities in their housing programmes. The hon. Member showed himself a little too sensitive in coming too quickly on too many occasions to the defence of his party on this score. We hope to have discussions with the authority with which he is connected and others to see if we can get over difficulties in this matter. I hope that the time will come very soon when public authorities such as that with which he has been associated for many years and other local authorities will step up their housing programmes as is the wish of the Government. There is no ceiling to priority areas in this country.
Turning to the kind of level we have set in this Bill, I repeat what I said in discussion of the earlier Amendment. On the basis of our experience in the operation of the current Prices and Incomes Act, the vast majority of authorities have operated satisfactorily their rent policy in the terms and spirit of that Act. On the basis of the kind of figures we have had as to the number of authorities which have had rent increases varying from 2s. 6d. to 5s. or 7s. 6d. over the past period when we have operated under the Act, we have no grounds for believing that the kind of voluntary agreement negotiated with the local authority association';—I accept the exclusion of the G.L.C.— will not be operated in the spirit in which it was established and in which it is incorporated in this Measure.
I am increasingly mystified as to why hon. Members opposite continue to persist in undue criticism of a policy which has been pursued with reluctance, as all concerned with prices and incomes levels do show reluctance, but nevertheless they have agreed to such a policy in negotia-

tions. That was the agreement and I should have hoped that this Committee would operate it.

Mr. Lubbock: The hon. Member for Chichester (Mr. Chataway) quoted an article by Mr. Macey. I did not read it, but I was interested in the comment because of the implication which lay behind it. If the hon. Member was saying thai in his opinion the average incomes of 7s. 6d. more properly related to a maximum of 12s. 6d. he was accepting the principle behind the Bill. If he was arguing the relationship between the average and the maximum I am surprised that he did not put down an Amendment to change 7s. 6d. to 12s. 6d.
If Mr. Macey's article made an adequate case for a higher maximum in relation to the average, I do not see now one could put this forward in an article unless one accepted the basis of the principle of the Bill. Mr. Macey's employers have frustrated the prices and incomes policy in the rent sector. But for that we would not be discussing this Amendment, but would be spending time on other matters.

Mr. Chataway: The article makes it clear that Mr. Macey, in common with most directors of housing, believes it to be entirely wrong for the Government to take away the freedom of local authorities in this sphere. He makes the point that with an average of 7s. 6d. it would be more logical to have a higher maximum.

Mr. Lubbock: Then why did not the hon. Gentleman table an Amendment to that effect? He could easily have done so.

Mr. Chataway: We did. It was not called.

Hon. Members: Withdraw.

Mr. Lubbock: In that case, why does not the hon. Gentleman argue, in the main debate on the Clause, the merits of the case for a higher maximum? He could have done that. There is nothing to stop him from putting forward arguments of that nature in the main debate.

The Deputy Chairman (Mr. Harry Gourlay): The hon. Gentleman would have been out of order if he had argued that case.

Mr. Lubbock: With respect, the hon. Gentleman was discussing some remarks


of Mr. Macey, Director of Housing of the G.L.C., to the effect that a 12s. 6d. increase was more appropriate than the 10s. increase provided for in the Bill. If you allowed a discussion on that matter, Mr. Gourlay, I do not see why the hon. Gentleman could not have gone into the merits of the argument. However, this is not essential criticism I make of the hon. Gentleman.
It is a little unfair of the hon. Gentleman to drag a chief officer of housing into a debate in Parliament and quote the views of officers who are not able to make themselves heard personally in Parliament. However, I leave that matter aside. My criticism is not directed to that point.
I am merely saying that the hon. Gentleman and his friends on the G.L.C. have done Britain a great disservice by provoking a confrontation between local authorities and the central Government which should never have occurred. Most local authorities have been perfectly willing to co-operate in applying the prices and incomes policy, as has everybody else. We may not like it, but we can see its necessity. Boards of big companies and members of trade unions have done their best to co-operate in keeping prices down to sensible levels. The hon. Gentleman and his friends make a series of propositions to the effect that, if a house is painted, the rent can be increased by more than 7s. 6d.—they do not say to what level.
The whole of the arguments advanced by hon. Gentlemen this evening have been directed to the proposition that rents should increase by much more than the amount prescribed in the Bill. Hon. Gentlemen should be honest and say what they mean. They want the rents of local authority and private tenants to go sky high. We know what hon. Gentlemen mean. Local authority tenants know what they mean. They advocate a policy which would mean in many cases a doubling of rents.
This is what the hon. Gentlemen and his friends are after, both on the G.L.C. and on other local authorities. I hope that local authority tenants who read the report of these debates will see the truth behind the hon. Gentleman's remarks.

Mr. Arthur Lewis: I apologise for the fact that I have not attended the debate till now. I have been in my constituency discussing a serious problem connected with the Bill. The Minister may not like my referring to it, but over 18 months ago the Ronan Point disaster occurred. We still have not had from the Ministry any satisfactory resolving of the issue of the payment of compensation to local authorities—

The Deputy Chairman: Order. This is not the Second Reading debate. This is the debate on the Question, That the Clause stand part of the Bill. It is not connected with Ronan Point.

Mr. Arthur Lewis: I agree. If you will allow me a few moments, Mr. Gourlay, I want to refer to subsections (4) and (5), which are relevant to this question.

The Deputy Chairman: There is no subsection (5) in the Clause.

Mr. Lewis: We are debating the Question, That Clause 1 stand part of the Bill, are we not?

The Deputy Chairman: No, we are debating Clause 2.

It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.

BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on the Rent (Control of Increases) Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Freeson.]

RENT (CONTROL OF INCREASES) BILL

Again considered in Committee.

Question again proposed,That the Clause stand part of the Bill.

Mr. Lewis: I have already apologised for not having had the opportunity to attend this debate all the time. Nevertheless, the points that I am about to make are relevant to Clause 2.
Clause 1 having been agreed to, the Bill permits local authorities, on certain


conditions, to increase rents by defined amounts. I was going on to explain that as good a local authority as we have in Newharn—and it is one of the best— will nevertheless find great difficulty in meeting its obligations in carrying out the provisions of this Clause relating to rents because the Government, having made a 40 per cent. grant, have imposed upon the local authority a 60 per cent. charge towards the cost of strengthening tower blocks. Tower blocks are houses within the meaning of Clause 1.
It is laid down that rents may be increased above the suggested amounts in Clause 2 if certain criteria are met. I should like to know what will be the position in areas such as mine, and in other constituencies, if the council says, "We have moved people out of Ronan Point. Some of them are afraid to return and will not go back. But as new tenants are taking over, we have the opportunity of asking for more than the 10s. or the 7s. 6d. average to cover the cost of improvements"—the improvements being the strengthening of tower blocks, which duty is imposed upon local authorities.
Local authorities such as mine will have to apply rents far in excess of the amount specified in the Clause. Otherwise, they will not be able to find the money to carry out the strengthening and other improvements. The Minister may say that they do not have to increase the rents, that they could increase the local rates instead. But this will mean that the people who have already suffered for nearly two years will find their rates going up. The Minister may say that he will not permit the local authority to raise rents above the 10s. or 7s. 6d.
I do not know what the position will be, but the situation as I have described it exists in Newham now. It is not hypothesis. Hundreds of people were moved out of these blocks of flats and they are having second thoughts about going back. That means that new tenants will be taking over. If there are new tenants, and if there are improvements—1 assume that there will be some strengthening eventually and it could be termed improvement—I want to be assured that in an area like mine, and others similarly affected, people will not suddenly find that they have to pay extra rent because

they were so unfortunate as to suffer a disaster.
It was not their wish to suffer in that disaster. I have never known an attitude like this to be taken before. After the Aberfan tragedy, the Government rightly footed the bill. But in circumstances such as I have just described, poor local authorities—and they are mainly the poor ones—will be confronted with a 60 per cent. imposed charge. I agree that the Minister is still considering it, but that is how it looks. Goodness knows how long he will be considering it. If I were considering something for 18 months, I should expect a kick in the pants if I did not come to a decision. The Ministry deserves a kick in the pants.
What worries me is this. Will the Bill be used as the vehicle for saying to local authorities like mine "Whether you like it or not, you now have to find the 60 per cent., and we shall give you permission" —which, incidentally, they do not want —"to increase rents above the 10s."? That would be a grave injustice. Unless I have an assurance from the Minister that the Bill will not be used to the disadvantage of authorities such as mine, I shall have grave doubts about supporting the Clause.
I regret that I inadvertently mentioned Clause 1, which has already been agreed, but my point ties in with Clause 2 as well because it is the amount of the rents which particularly concerns me. I hope that hon. Members who have these tower blocks in their constituencies will be aware of the danger which may confront their constituents.

Mr. Freeson: I congratulate my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) on his ingenuity and the promptitude with which he brought it to bear on this topic. As he said, the Minister is considering the question which he raised. He may think that we are taking too long, but he will appreciate that there have been consultations with the local authority associations concerned. They expressed certain views and made representations on the level of the contribution proposed by the Minister —I do not recall the exact date of the meeting, but it was earlier this year— and those representations are now being considered.
As regards the Clause and its relevance to the specific issue put to us in connection with the aftermath of Ronan Point, all I can say is that the Bill, far from precluding them, requires local authorities to apply in respect of any average increase in excess of the 7s. 6d. laid down. I am not seeking to encourage or invite applications; I am merely stating what is laid down in the Bill.
There will therefore, be nothing to prevent a local authority—indeed, it is required in the Bill for the reasons given by the hon. Member for Orpington (Mr. Lubbock) earlier, because of the dispute which arose—to make application and submit the evidence which gives rise to its view that it should have a higher average rent increase in its area.
I cannot go beyond that, except perhaps to mention, since departmentally I have an association with the issue of the Aberfan disaster, that the kind of thinking we have sought to apply to the aftermath of Ronan Point has been very much along the lines of thinking on the role of Government in the aftermath of national disasters. The Government have not taken a 100 per cent. cost burden upon the Exchequer, but they have sought to make a good contribution.
I cannot go into details which would not be relevant tonight, but that was the position with regard to that national disaster, and it was in that spirit that we discussed the matter and made certain recommendations about the Ronan Point situation. Tonight is not the occasion to go further than that. The matter is before my right hon. Friend.

Mr. John Page: When are we likely to know the result of the Ronan Point discussions? The Minister said earlier that it would be this year. When shall we have the answer?

Mr. Freeson: I have just said that in my view this is not a matter for tonight.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clauses 3 and 4 ordered to stand part of the Bill.

Clause 5

RESTRICTIONS ON INCREASES IN RENTS UNDER REGULATED TENANCIES

The Deputy Chairman: The next Amendment selected is Amendment No. 5, with which it may be convenient for the Committee to discuss Amendment No. 9, in the Schedule, page 7, line 5, leave out from 'of' 'to 'one' in line 7.

Mr. Graham Page: I beg to move Amendment No. 5, in page 4, line 36, leave out 'or 1971 '.
The Clause provides that when a fair rent has been fixed by a rent officer for a private tenancy it shall not be recoverable for two years if it is fixed during 1970, and one year if it is fixed during 1971. It was the Labour Government of 1965 which put on the Statute Book the procedure for fixing a fair rent. The Government have claimed that it is a rent fair both to landlord and tenant.
The principle of fair rent was first breached in the Housing Act, 1969, under which landlords who carry out improvements to dwelling houses must wait in some cases four years, and in others as much as six years, before receiving what has already been declared to be a fair rent. Those were special cases, but now in the Bill the principle of fairness is breached with respect to all private tenancies. The provisions of the Clause, coupled with the Schedule, forbid a landlord recovering from the tenant for a period of time the rent fixed as fair by an independent person—the rent officer —and perhaps even an independent committee—the rent assessment committee.
Our Amendment says in effect that if the Government's policies make it necessary that a tenant shall not be charged the fair rent for a period of a year, and the Government are likely to remain in office for that period, we had better have that provision, but that a year is long enough. The Bill should not extend its effect beyond 1970, and rents declared to be fair rents in 1971 should be recoverable by the landlord at once. If the Bill is necessary, it is the Government's actions that have made it so. It should not require the landlord to pay for the Government's failures of policy.

10.15 p.m.

The Minister of State, Ministry of Housing and Local Government (Mr. Denis Howell): The Amendment seeks to remove the protection which the Government think that tenants of private landlords need in 1971 and possibly 1972. Under our proposals, the fair rent increase;: agreed have to be phased, and I do not think that the Opposition are proposing that a fair rent should be paid at once and in full, for the obvious reason that, in this part of the Bill and by the new proposals for rent officers and so on, we are trying to strike a fair balance between landlord and tenant.
But we recognise that, because one has has to take account of the starting point of the operation—the rent being paid before the fair rent was established—after the fair rent has been established, unfortunately, as some of my hon. Friends would think, the difference between the existing rent and the fair rent is very steep in many cases and it would, therefore, be monstrous to say that there should be no phasing and no protection against the automatic implementation of the fair rent.
If we omitted the words "or 1971", the effect would be that, although one third of the increase would be paid in 1970, the other two-thirds would have to be paid in 1971, or, if the new fair rent was registered in 1971, the whole increase would have to be paid on that account. This would be a monstrous pro-

posal in the case of many tenants whose budgets are geared to their existing rent. Although we believe it right, since we enunciated the principle of fair rents— something the Opposition did not attempt to do when in office—and are trying to get the balance right, to do it in a reasonable and civilised manner, and it would create considerable hardship in the lives of many tenants and their families if we did not allow for phasing of the kind I have mentioned.

I hope that the hon. Gentleman will not press the Amendment, because it shows a complete disregard for the considerable hardship that many tenants would face if the whole increase were imposed in one go. If a small or relatively small increase is agreed, then, of course, the landlord will be able to have it in one year, but if it is a steep increase, it is clear that we should give the tenant some protection. Not to do so would be to create considerable difficulties in many cases and would also affect the prices and incomes policy and the policy towards rents and so on which we judge to be necessary. If phasing is right at the moment, I cannot believe that it can be wrong in 1971. If it is right in 1969 and 1970, it must also be right in 1971 and therefore I cannot accept the Amendment.

Question put, That the Amendment be made: —

The Committee divided: Ayes 124, Noes 189.

Division No. 17.]
AYES
[10.19 p.m.


Ailason, James (Hemel Hempstead)
Dodds-Parker, Douglas
Jenkin, Patrick (Woodford)


Atkins, Humphrey (M't'n &amp; M'd'n)
Eden, Sir John
Kershaw, Anthony


Baker, W. H. K. (Banff)
Elliot, Capt. Walter (Carshalton)
King, Evelyn (Dorset, S.)


Bainiel, Lord
Eyre, Reginald
Kitson, Timothy


Bennett, Dr. Reginald (Cos. &amp; Fhm)
Farr, John
Lancaster, Col. C. G.


Biffen, John
Fortescue, Tim
Lane, David


Boardman, Tom (Leicester, S.W.)
Foster, Sir John
Legge-Bourke, Sir Harry


Body, Richard
Glover, Sir Douglas
Lloyd, Ian (P'tsm'th, Langstone)


Boyd Carpenter, Rt. Hn. John
Cower, Raymond
MacArthur, Ian


Boyle, Rt. Hn. Sir Edward
Grant, Anthony
Maclean, Sir Fitzroy


Brewis, John
Grant-Ferris, Sir Robert
McMaster, Stanley


Brown, Sir Edward (Bath)
Griffiths, Eldon (Bury St. Edmunds)
McNair-Wilson, Michael


Bruce-Gardyne, J.
Griffiths Eldon, St. Edmunds)
Maddan, Martin


Buchanan-Smith, Alick(Angus,N&amp;M)
Gurden, Harold
Maginnis, John E.


Buck, Antony (Colchester)
Hal-Davis, A. G. F.
Mawby, Ray


Campbell, B. (Oldham, W.)
Harrison, Brian (Maldon)
Maydon, Lt.-Cmdr. S. L. C.


Campbell, Gordo I (Moray &amp; Nairn)
Harrison, Col. Sir Harwood (Eye)
Mills, Stratton (Belfast, N.)


Carlisle, Mark
Hastings, Stephen
Miscampbell, Norman


Chataway, Christopher
Hawkins, Paul
Monro, Hector


Cooke, Robert
Heald, Rt. Hn. Sir Lionel
Montgomery, Fergus


Corfield, F. V.
Heseltine, Michael
More, Jasper


Costain, A. P.
Higgins, Terence L.
Morgan, Ceraint (Denbigh)


Crowder, F. P.
Hill, J. E. B.
Mott-Radclyffe, Sir Charles


Currie, C. B. H.
Hogg, Rt. Hn. Quintin
Munro-Lucas-Tooth, Sir Hugh


Dalkeith, Earl of
Holland, Philip
Nabarro, Sir Gerald


Dance, James
Hornby, Richard
Neave, Airey


Dean, Paul
Hunt, John
Nicholls, Sir Harmar


Deedes, Rt. Hn. W. F. (Ashford)
Irvine, Bryant Godman (Rye)
Nott, John




Page, Graham (Crosby)
Silvester, Frederick
Walker-Smith, Rt. Hn. Sir Derek


Page, John (Harrow, W.)
Sinclair, Sir George
Ward, Christopher (Swindon)


Percival, Ian
Smith, Dudley (W'wick &amp; L'mington)
Ward, Dame Irene


Pike, Miss Mervyn
Smith, John (London &amp; w'minster)
Wells, John (Maidstone)


Pink, R. Bonner
Stainton, Keith
Whitelaw, Rt. Hn. William


Pounder, Rafton
Stoddart-Scott, Col. Sir M.
Wiggin, A. W.


Prior, J. M. L.
Summers, Sir Spencer
Williams, Donald (Dudley)


Pym, Francis
Taylor, Frank (Moss Side)
Wilson, Geoffrey (Truro)


Rhys Williams, Sir Brandon
Temple, John M.
Wolrige-Gordon, Patrick


Rodgers, Sir John (Sevenoaks)
Thatcher, Mrs. Margaret
Worsley, Marcus


Rossi, Hugh (Hornsey)
Tilney, John
Wylie, N. R.


Russell, Sir Ronald
van Straubenzee, W. R.



St. John-Stevas, Norman
Vaughan-Morgan, Rt. Hn. Sir John
TELLERS FOR THE AVES:


Scott-Hopkins, James
Waddington, David
Mr. Bernard Weatherill and


Shaw, Michael (Sc'b'gh &amp; Whitby)
Walker, Peter (Worcester)
Mr. Walter Clegg.




NOES


Allaun, Frank (Salford, E.)
Golding, John
Mason, Rt. Hn. Roy


Alldritt, Walter
Gregory, Arnold
Mellish, Rt. Hn. Robert


Anderson, Donald
Grey, Charles (Durham)
Millan, Bruce


Atkins, Ronald (Preston, N.)
Griffiths, Eddie (Brightside)
Miller, Dr. M. S.


Atkinson, Norman (Tottenham)
Hamilton, James (Bothwell)
Milne, Edward (Blyth)


Bacon, Rt. Hn. Alice
Hamilton, William (Fife, W.)
Mitchell, R. C. (S'th'pton, Test)


Baxter, William
Hamling, William
Molloy, William


Beaney, Alan
Hannan, William
Morris, Alfred (Wythenshawe)




Morris, Charles R. (Openshaw)


Bence, Cyril
Harper, Joseph
Morris, John (Aberavon)


Bennett, James (G'gow, Bridgeton)
Harrison, Walter (Wakefield)
Moyle, Roland


Binns, John
Haseldine, Norman
Neal, Harold


Blackburn, F.
Hazell, Bert
Newens, Stan


Blenkinsop, Arthur
Henig, Stanley
Norwood, Christopher


Boardman, H. (Leigh)
Herbison, Rt. Hn. Margaret
Oakes, Gordon


Booth, Albert
Hilton, W. S.
O'Halloran, Michael


Boston, Terence
Horner, John
Orbach, Maurice


Bottomley, Rt. Hn. Arthur
Howeil, Denis (Small Heath)
Oswald, Thomas


Hoyden, James
Howie, W.
Owen, Will (Morpeth)


Broughton, Sir Alfred
Hoy, Rt. Hn. James
Page, Derek (King's Lynn)


Brown, Hugh D. (G'gow, Provan)
Huckfield, Leslie
Pannell, Rt. Hn. Charles


Brown, Bob(N'c'tle-upon-Tyne,W.)
Hughes, Roy (Newport)
Park, Trevor


Brown, R. W. (Shoreditch &amp; F'bury)
Hunter, Adam
Pavitt, Laurence


Buchanan, Richard (G'gow, Sp'burn)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pearson, Arthur (Pontypridd)


Cant, R. B.
Johnson, James (K'ston-on-Hull, W.)
Perry, Ernest G. (Battersea, S.)


Carmichael. Neil
Johnston, Russell (Inverness)
Perry, George H. (Nottingham, S.)


Carter-Jones, Lewis
Jones, Dan (Burnley)
Prentice, Rt. Hn. Reg.


Chapman, Donald
Jones,Rt.Hn.Sir Eiwyn(W.Ham,S.)
Price, Thomas (Westhoughton)


Coleman, Donald
Jones, J. Idwal (Wrexham)
Probert, Arthur


Concannon, J. D.
Jones, T. Alec (Rhondda, West)
Richard, Ivor


Conlan, Bernard
Judd, Frank
Roberts, Albert (Normanton)


Crawshaw, Richard
Keoley, Richard
Roberts, Rt. Hn. Goronwy


Dalyell, Tam
Kerr, Russell (Feltham)
Roberts, Gwilym (Bedfordshire, S.)


Darling, Rt. Hn. George
Lawler, Wallace
Robertson, John (Paisley)


Davidson, Arthur (Accrington)
Lawson, George
Ross, Rt. Hn. William


Davies, Ednyfed Hudson (Conway)
Leadbitter, Ted
Ryan, John


Davies, G. Elfed (Rhondda, E.)
Lee, Rt. Hn. Jennie (Cannock)
Shaw, Arnold (llford, S.)


Davies, Rt. Hn. Harold (Leek)
Lee, John (Reading)
Silverman, Julius


Davies, S. O. (Merthyr)
Lestor, Miss Joan
Small, William


Dempsey, James
Lewis, Arthur (W. Ham, N.)
Spriggs, Leslie


Dewar, Donald
Lewis, Ron (Carlisle)
Swain, Thomas


Dickens, James
Loughin, Charles
Taverne, Dick


Doig, Peter
Lubbock, Eric
Thomas, Rt. Hn. George


Dunnett, Jack
Lyon, Alexander W. (York)
Tinn, James


Dunwoody, Mrs. Gwyneth (Exeter)
Lyons, Edward (Bradford, E.)
Urwin, T. W.


Eadie, Alex
Mabon, Dr. J. Dickson
Varley, Eric G.


Edwards, Robert (Bilston)
McBride, Neil
Wainwright, Edwin (Dearne Valley)


Edwards, William (Merioneth)
McCann, John
Wainwright, Richard (Colne Valley)


English, Michael
MacColl, James
Walker, Harold (Doncaster)


Ensor, David
MacDermot, Niall
Watkins, David (Consett)


Evans, Fred (Caerphilly)
McElhone, Frank
Watkins, Tudor (Brecon &amp; Radnor)


Evans, loan L. (Birm'h'm, Yardley)
McGuire, Michael
Weitzman, David


Faulds, Andrew
Mackenzie, Alasdair(Ross&amp;Crom'ty)
Wellbeloved, James


Fernybough, E.
Mackenzie, Gregor (Rutherglen)
Wells, William (Walsall, N.)


Finch, Harold
Mackie, John
Wilkins, W. A.


Fitch, Alan (Wigan)
Maclennan, Robert
Willey, Rt. Hn. Frederick


Fletcher, Rt.Hn.SirEric(lslington,E.)
McMillan, Tom (Glasgow, C.)
Williams, Clifford (Abertillery)


Fletcher, Ted (Darlington)
McNamara, J. Kevin
Willis, Rt. Hn. George


Foot, Michael (Ebbw Vale)
MacPhersnn, Malcolm
Winnick, David


Ford, Ben
Mahon, Simon (Bootle)
Woodburn, Rt. Hn. A.


Forrester, John
Mallalieu, E. L. (Brigg)
Woof, Robert


Fowler, Gerry
Mallalieu,J.P.W.(Huddersfie!d,E.)



Freeson, Reginald
Manuel, Archie
TELLERS FOR THE NOES:


Calpern, Sir Myer
Mapp, Charles
Mr. Ernest Armstrong and


Gardner, Tony
Marks, Kenneth
Mr. R. F. H. Dobson.

Mr. Denis Howell: I beg to move Amendment No. 6, in page 5, leave out lines 1 to 4 and insert:
'Where a tenant under a regulated tenancy of a dwelling, or a person who might succeed him as a statutory tenant, becomes the tenant under a new regulated tenancy of the dwelling and, whether before or after he becomes the tenant under the new regulated tenancy, a rent for the dwelling is registered, then, if the provisions of subsection (1) of this section apply—'.
This is a technical Amendment, dealing with a very involved situation. [Laughter.] I am glad that I carry hon. Gentlemen with me on that at this late hour. It deals with dwellings that were subject to contractual arrangements then become statutory and then go back to contractual. There is a possibility of a loophole which I am sure we would all like to plug.

Mr. Graham Page: Having referred to our Amendments as "vague" on one occasion and "imprecise" on another, is the Minister of State not a little bit embarrassed to have to come forward with this Amendment, to stop up a loophole?

Amendment agreed to.

10.30 p.m.

Mr. Denis Howell: I beg to move Amendment No. 7, in page 5, line 23, leave out 'or paragraph 6' and insert '6 or 8'.
Nothing that I say is vague or imprecise.Amendments Nos.7 and 8 deal

with very technical matters and are put down to stop overlapping.

Amendment agreed to.

Further Amendment made: No. 8, in page 5, line 24, leave out 'or paragraph 6' and insert '6 or 8'.—[Mr. Denis Howell.]

Clause 5, as amended, ordered to stand part of the Bill.

Clauses 6 and 7 ordered to stand part of the Bill.

Schedule

PHASING OF RENT INCREASES

Mr. Denis Howell: I beg to move Amendment No. 11, in page 7, line 30, after 'sixpence', insert 'a week'.
This Amendment rectifies an error on our part, for which I apologise. Without it, the 7s. 6d. could be a month or a year—and, in fact, it is to be a week.

Amendment agreed to.

Schedule, as amended, agreed to.

Bill reported, with Amendments; as amended, considered.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading)—

The House divided: Ayes 183, Noes 124.

Division No. 18.]
AYES
(10.32 p.m.


Allaun, Frank (Salford, E.)
Concannon, J. D.
Freeson, Reginald


Alldritt, Walter
Conlan, Bernard
Galpern, Sir Myer


Anderson, Donald
Crawshaw, Richard
Gardner, Tony


Armstrong, Ernest
Dalyell, Tam
Golding, John


Atkins, Ronald (Preston, N.)
Davidson, Arthur (Accrington)
Gregory, Arnold


Atkinson, Norman (Tottenham)
Davies, Ednyfed Hudson (Conway)
Grey, Charles (Durham)


Bacon, Rt. Hn. Alice
Davies, G. Elfed (Rhondda, E.)
Griffiths, Eddie (Brightside)


Baxter, William
Davies, Rt. Hn. Harold (Leek)
Hamilton, William (Fife, W.)


Beaney, Alan
Davies, S. O. (Merthyr)
Hamling, William


Bence, Cyril
Dempsey, James
Hannan, William


Bennett, James (G'gow, Bridgeton)
Dewar, Donald
Harper, Joseph


Binns, John
Dickens, James
Harrison, Walter (Wakefield)


Blackburn, F.
Doig, Peter
Haseldine, Norman


Blenkinsop, Arthur
Dunnett, Jack
Hazell, Bert


Boardman, H. (Leigh)
Dunwoody, Mrs. Gwyneth (Exeter)
Henig, Stanley


Booth, Albert
Eadie, Alex
Herbison, Rt. Hn. Margaret


Boston, Terence
Edwards, William (Merioneth)
Hilton, W. S.


Bottomley, Rt. Hn. Arthur
English, Michael
Hordern, Peter


Boyden, James
Ensor, David
Howell, Denis (Small Heath)


Broughton, Sir Alfred
Evans, Fred (Caerphilly)
Howie, W.


Brown, Hugh D. (G'gow, Provan)
Evans, loan L. (Blrm'h'm, Yardley)
Hoy, Rt. Hn. James


Brown, Bob(N'c'tle-upon-Tyne,W.)
Faulds, Andrew
Huckfield, Leslie


Brown, R. W. (Shoreditch &amp; F'bury)
Fernyhough, E.
Hughes, Roy (Newport)


Buchanan, Richard (G'gow, Sp'burn)
Fitch, Alan (Wigan)
Hunter, Adam


Cant, R. B.
Fletcher,Rt.Hn.Sir Eric(lslington,E.)
Jackson, Colin (B'h'se &amp; Spenb'gh)


Carmichael, Neil
Fletcher, Ted (Darlington)
Johnson, James (K'ston-on-Hull, W.)


Carter-Jones Lewis
Foot, Michael (Ebbw Vale)
Johnston, Russell (Inverness)


Chapman, Donald
Forrester, John
Jones, Dan (Burnley)


Coleman, Donald
Fowler, Gerry
Jones,Rt.Hn.Sir Elwyn(W.Ham.t.>




Jones, J. Idwal (Wrexham)
Mallalieu,J.P. W.(Huddersfield,E.)
Roberts Rt. Hn. Goronwy


Jones, T. Alec (Rhondda, West)
Manuel, Archie
Roberts Gwilym (Bedfordshire, S.)


Judd, Frank
Mapp, Charles
Robertson John (Paisley)


Kelley, Richard
Marks Kenneth
Ross, Rt. Hn, William


Kerr, Russell (Feltham)
Mason Rt. Hn. Roy
Ryan, John


Lawler, Wallace
Mellish Rt. Hn. Robert
Shaw, Arnold (llford, S.)


Lawson, George
Millan, Bruce
Silverman, Julius


Leadbitter, Ted
Miller, Dr. M. S.
Small William


Lee, Rt. Hn. Jennie (Cannock)
Milne, Edward (Blyth)
Spriggs Leslie


Lee, John (Reading)
Mitchell R. C. (S'th'pton, Test)
Swain, Thomas


Lestor, Miss Joan
Molloy, William
Taverne Dick


Lewis, Arthur (W. Ham, N.)
Morris, Alfred (Wythenshawe)
Thomas, Rt. Hn. George


Lewis, Ron (Carlisle)
Morris, Charles R. (Openshaw)
Tinn, James


Loughlin, Charles
Morris, John (Aberavon)
Urwin, T. W.


Lubbock, Eric
Neal, Harold
Varley Eric G.


Lyon, Alexander W. (York)
Newens, Stan
Wainwright Edwin (Dearne Valley)



Norwood, Christopher



Lyons, Edward (Bradford, E.)
Oakes, Gordon
Wainwright, Richard (Colne Valley)


Mabon, Dr. J. Dickson
O'Halloran, Michael
Walker, Harold (Doncaster)


McBride, Neil
Orbach Maurice
Watkins, David (Consett)


McCann, John
Oswald, Thomas
Watkins, Tudor (Brecon &amp; Radnor)


MacColl, James
Owen, Dr. David (Plymouth, S'tn)
Weitzman, David


MacDermot, Niall
Page, Derek (King's Lynn)
Wellbeloved, James


McElhone, Frank
Pannell, Rt. Hn. Charles
Wells William (Walsall N.)


McGuire, Michael
Park, Trevor
White, Mrs. Eirene


Mackenzie, Alasdair(Ross&amp;Crom'ty)
Pavitt, Laurence
Williams, Clifford (Abertillery)


Mackenzie, Gregor (Rutherglen)
Pearson, Arthur (Pontypridd)
Wills, Rt. Hn. Ceorge


Mackie, John
Perry Ernest G. (Battersea, S.)
Winnick, David


Maclennan, Robert
Perry, George H. (Nottingham, S.)
Woodburn, Rt. Hn. A.


McMillan, Tom (Glasgow, C.)
Prentice, Rt. Hn. Reg.
Woof, Robert


McNamara, J. Kevin
Price, Thomas (Westhoughton)



MacPherson, Malcolm
Probert, Arthur
TELLERS FOR THE AYES:


Mahon, Simon (Bootle)
Richard Ivor
Mr. James Hamilton and


Mallalieu, E. L. (Brigg)
Roberts Albert (Normanton)
Mr R. P. H. Dobson.




NOES


Allason, James (Hemel Hempstead)
Hastings, Stephen
Pike, Miss Mervyn


Atkins, Humphrey (M't'n &amp; M'd'n)
Hawkins, Paul
Pink, R. Bonner


Baker, W. H. K. (Banff)
Heald, Rt. Hn. Sir Lionel
Pounder Rafton


Balniel, Lord
Heseltine, Michael
Prior, J. M. L.


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Higgins, Terence L.
Pym Francis


Biffen, John
Hill, J. E. B.
Rhys Williams, Sir Brandon


Boardman, Tom (Leicester, S.W.)
Hogg, Rt. Hn. Quintin
Rodgers, Sir John (Sevenoaks)


Body, Richard
Holland, Philip
Rossi, Hugh (Hornsey)


Boyd-Carpcnter, Rt. Hn. John
Hornby, Richard
Russell, Sir Ronald


Boyle, Rt. Hn. Sir Edward
Hunt, John
St. John-Stevas, Norman


Brewis, John
Irvine, Bryant Godman (Rye)
Scott-Hopkins, James


Brown, Sir Edward (Bath)
Jenkin, Patrick (Woodford)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Bruce-Gardyne, J.
Kershaw, Anthony
Silvester, Frederick


Buchanan-Smith, Alick(Angus,N&amp;M)
King, Evelyn (Dorset, S.)
Sinclair, Sir George


Buck, Antony (Colchester)
Kitson, Timothy
Smith, Dudley (W'wick &amp; L'mington)


Campbell, B. (Oldham, W.)
Lancaster, Col. C. G.
Smith, John (London &amp; W'minster)


Campbell, Gordon (Moray &amp; Nairn)
Lane, David
Stainton, Keith


Carlisle, Mark
Legge-Bourke, Sir Harry
Stoddart-Scott, Col. Sir M.


Chataway, Christopher
Lloyd, Ian (P'tsm'th, Langstone)
Summers, Sir Spencer


Clegg, Walter
MacArthur, Ian
Taylor Frank (Moss Side)


Cooke, Robert
Maclean, Sir F, tzroy
Temple, John M.


Corfield, F. V.
 McMastcr, Stanley
Thatcher, Mrs. Margaret


Costain, A. P.
McNair-Wilson, Michael
Tilney, John


Crowder, F. P.
Maddan, Martin
van Straubenzee, W. R.


Currie, G. B. H.
Maginnis, John E.
Vaughan-Morgan, Rt. Hn. Sir John


Dalkeith, Earl of
Mawby, Ray
Waddington, David


Dance, James
Maydon, Lt.-Cmdr. S. L. C.
Walker, Peter (Worcester)


Dean, Paul
Mills, Stratton (Belfast, N.)
Walker-Smith, Rt. Hn. Sir Derek


Deedes, Rt. Hn. W. F. (Ashford)
Miscampbell, Norman
Ward, Christopher (Swindon)


Dodds-Parker, Douglas
Monro, Hector
Ward Dame Irene


Eden, Sir John
Montgomery, Fergus
Wells, John (Maidstone)


Elliot, Capt. Walter (Carshalton)
More, Jasper
Whitelaw, Rt. Hn. William


Farr, John
Morgan, Geraint (Denbigh)
wiggin, A. W.


Fisher, Nigel
Mott-Radclyffe, Sir Charles
Williams, Donald (Dudley)


Fortescue, Tim
Munro-Lucas-Tooth, Sir Hugh
Wilson, Geoffrey (Truro)


Foster, Sir John
Nabarro, Sir Gerald
Wolrige-Gordon, Patrick


Glover, Sir Douglas
Neave, Airey
Worsley, Marcus


Gower, Raymond
Nicholls, Sir Harmar
Wylie, N R.


Grant, Anthony
Nott, John



Grant-Ferris, Sir Robert
Orr-Ewing Sir Ian
TELLERS FOR THE NOES:


Griffiths, Eldon (Bury St. Edmunds)
Page, Graham (Crosby)
Mr. Reginald Eyre and


Gurden, Harold
Page, John (Harrow W.)
Mr. Bernard Weatherill.


Harrison, Col. Sir Harwood (Eye)
Percival, Ian

Bill accordingly read the Third time, and passed.

ROADS (SCOTLAND) BILL

Order for Second Reading read.

Bill referred to the Scottish Grand Committee.—[Dr. Dickson Mabon.]

SCOTLAND (SCHOOL BUILDING PROGRAMME)

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Armstrong.]

10.42 p.m.

Mr. W. H. K. Baker: I wish to base my remarks on the Scottish Education Department Circular No. 600 of October, 1965, and to refer specifically to how it is affecting my own constituency of Banffshire. I begin by quoting from paragraph 8 of the circular, which says, inter alia:
The Secretary of State asks authorities to organise their secondary"—
that is, their secondary school—
provision on comprehensive lines and to introduce this form of organisation as circumstances permit.
Banffshire Education Committee has faithfully carried out the necessary review of its plans for the reorganisation on comprehensive lines and has thus espoused the comprehensive course, a course which I fully agree with and support the committee in. It did this particularly bearing in mind paragraph 11 of yet another Scottish Education Department Circular, No. 609, of 19th May, 1966, which spoke of a co-ordinated building programme arranged by the Scottish Education Department. That circular was followed by a letter to the County Director of Education from the S.E.D., dated 19th July, 1966, which said, in essence, that the S.E.D. approved of the list of priorities as laid down by the Education Committee at that time.
It was eventually decided that there would be built in the county three large comprehensive schools, one each at Keith, Banff and Buckie, each being fed from a large catchment area around those three main towns. Subsequently, after strong pressure from a joint committee formed on Speyside, Banffshire Education Committee agreed in principle to the establishment of a school on Speyside.At the

same time, the Government agreed in principle to the same project after strong representations by myself, and for that the county and myself are very grateful.
The present position is that Keith Grammar School and Banff Academy are fully operative, and it is perfectly true to say that already they are bursting at the seams. Buckie High School is woefully inadequate, and unable to cope with the secondary school pupils from what I have called its catchment area.
Taking the overall position of the county into consideration, Banffshire Education Committee has done its utmost to meet the Government's policy, but it has not been given the tools to finish the job, that is, the necessary finance. At least three newly-built or reconstructed secondary schools have been discarded, and others have been closed, because of the change in the central Government's policy which came about after 1965. Thus, large capital expenditure on secondary has been wasted. That is no fault of the education authority, and it is not use looking back in anger, for that certainly will not build new schools. The county is now being penalised because it has carried out Government policy, and not only is the authority suffering, but the pupils and indeed the parents.
It is essential that equal opportunities —and this is Government policy—should be available for all children throughout the entire country. The reason why only those children who reside in the Banff catchment area are enjoying the benefits while the rest of the children in the county are not, is that there is a shortfall in the capital building allocation by the Government. The county now has four types of secondary school, and only one is fully comprehensive. That in itself is a complete negation of the Government's policy of all-through comprehensive schools.
The Banff Education Committee, at the behest of the Scottish Education Department, has drawn up, in three parts, a list of priorities, as follows. First, Buckie High Schol; to alleviate the present overcrowding—the roll is 728—to take in 203 extra secondary pupils from the Buckie catchment area and to prepare for an approximately 10 per cent. increase in students in 1972 as a result of the raising of the school-leaving age, the allocation


required is no less than £650,000. The authority has planned to adapt and enlarge the building which was put up in 1927. We are not asking for an entirely new building to be constructed. The county council realises the necessity for economy and is perfectly willing to adapt where possible.
Second on the list of priorities is the new Speyside school. Again, it is pertinent to quote from S.E.D. Circular 600, paragraph 10:
[The Secretary of State] appreciates, however, that in some areas geographical factors will make the 'all-through' comprehensive school impracticable, because it would impose on very many of the pupils an intolerable burden of daily travel, or even the need to live away from home.
That is precisely why the education authority has agreed to have a new school at Speyside and have put it high on the list of priorities.
Many secondary school pupils travel more than 50 miles per day to Keith, during many months of the year in darkness, and often in wild weather. They are accommodated at Keith Grammar School, which was never designed for the large numbers which it now has to house. For the new school at Speyside £450,000 is needed. The difficulties in Banffshire are not confined to secondary building alone. The Buckie primary school is packed to capacity and is forced to operate a three-stream system of education which has been harshly criticised by the Scottish Education Department.
I turn to the third on the list of priorities of the education committee, Whitehills primary school. That has been described by H.M. Inspector of Schools as being in the worst condition of any primary school in the north east of Scotland. It is in a deplorable state. The capital required to reconstruct the school is £90,000. Thus the capital required for Buckie High School, the new Speyside school and the reconstruction of Whitehills primary school amounts to £1,190,000.
This figure should be borne in mind when one remembers that in a letter of 22nd August, 1969, to the authority the Scottish Education Department announced a capital allocation for the first half of a two year period to March, 1972, of

£100,000.That is a shortfall of nearly £1,100,000 on requirement.
At the meeting on 31st October at St. Andrew's House, to which the Minister referred in his Answer to me last Wednesday, he stated that the allocation for the second half of the period to March 1972 is likely to increase towards the end of the year. I hope that tonight he will be able to give the House some information on this subject.
The delegation from the authority agreed to go back to see how best they could utilise about a twelfth of the sum of £100,000 which they really need. They have decided in principle at least to build a three-storey block at Buckie High School, leaving the ground floor unfinished. All that will achieve is that the rector will be able to bring into his school the remaining secondary pupils in his catchment area. There will be no technical provision, no physical education provision, nothing for school means, and no refurbishing of the 1927 building.
At best, this can be described as a makeshift arrangement and it still depends on the fulfilment of a further £150,000 being allocated before March, 1972. So far, we have no promise of that. This is not good enough. As one county official said to me only yesterday, "How can we plan anything if we do not know sufficiently far ahead what we will have to spend?"
A headline in yesterday's Banffshire Journal speaks for itself:
Parents will be told Government are to blame for lack of progress in school building.
I think that that is fair comment.
I conclude by impressing on the Under-Secretary of State, with all the power at my command, the urgency of the situation. Without a substantial part of the required allocation being made available quickly, the proposal to raise the school-leaving age in Banffshire in 1972 is total nonsense. I know that I have the support of the entire country behind me in my plea tonight. Let the Government meet their responsibilties in an equitable and just manner.

10.55 p.m.

The Joint Under-Secretary of State for Scotland (Mr. Bruce Millan): The hon. Member for Banff (Mr. W. H. K. Baker) has dealt almost exclusively with the Banffshire situation.But I am sure he


will understand if, first, I say something about the general background, especially as the title of his Adjournment debate slightly misled me, though I know that he was in no way responsible. I thought that he had intended to say a number of things about the Scottish programme as a whole. In any case, I would have preferred to deal with what he has said by dealing first with Scotland and then with the particular points about Banffshire. I hope that in the time available to me I can take up all or most of the points made by the hon. Gentleman about his own education authority.
It is useful to remind hon. Members of the present scale of the school building programme. In 1965 and 1966 the average annual value of school building projects in Scotland as a whole was about £17 million. With the raising of the school-leaving age then projected originally for 1970–71, the level of starts was raised to £26 million a year for the three-year period from 1967–68 to 1969–70, giving a total programme of £78 million.
When the raising of the school-leaving age was deferred to 1972–73, the programme was reduced to £73 million and, as I announced in some detail during the debate on the Education Estimates on 3rd July last, the three-year programme of £73 million was extended to make a five-year programme for the period 1967–68 to 1971–72, aimed at starting school building to the value of about £125 million, or £25 million a year on average.
That is the programme for the full period, and the authorities have made an extremely good start with it In fact, the progress has been so rapid in the years 1967–68 and 1968–69 that, assuming similar progress is maintained in the present year—and there is every indication that it will—we estimate that the authorities will have started about £89 million worth of building by March, 1970.
This means, as I explained in the debate I have mentioned and as was explained in a circular subsequently sent to local authorities, that the starts in the remaining two years of the programme, 1970–72, will be at a lower level than the starts for the three years to 1970. Authorities have had the advantage of being able to start the projects which are necessary for the raising of the age

in most cases in very good time indeed—

Mr. Ian MacArthur: While We can understand that with the postponement of the raising of the school-leaving age for two years a slight decline in the number of starts was to be expected, can the hon. Gentleman explain how it is that the number of approvals given for new school building in Scotland has fallen in the first nine months of the year by well over 15 per cent.?

Mr. Millan: With respect, if I am to answer the points raised by the hon. Member for Banff it is not possible for me to take up the point just mentioned by the hon. Member for Perth and East Perthshire (Mr. MacArthur), but I should be glad to discuss it on another occasion. I will be referring to starts figures for this year, which are the important thing. Approvals are not so important. We are talking basically of the starts to meet the 1972 date.
What I have said about the general scale of the programme and the way in which it would move over the next two years is simply a repetition of what has been given out in the circular, and of what I said in the Estimates debate earlier this year—

Mr. MacArthur: Will the Minister give way?

Mr. Millan: No. There may be time at the end of my remarks, but if I give way now I shall not be able to deal with the schools in Banffshire, which will not, I am sure, please the hon. Member's hon. Friend.
The total value of school building started rose from £16·7 million in 1966 to £25·4 million in 1967 and £35·5 million in 1968, and the 1969 figures are also very good. A high proportion of starts is now for secondary accommodation and we ought to have a substantial number of projects completed in very good time for the raising of the school-leaving age in 1972–73. In the immediate period beyond 1970, the overriding requirement will be to continue to provide accommodation for the additional number of pupils resulting from the natural growth in the school population, the movement of the existing school population, for example, to new towns and other new


housing areas and, of course, the raising of the school-leaving age. This does not mean, however, that other aspects of the programme are being neglected. For example, there is scope for replacing and improving old schools.
Inevitably, the demand for roofs-overheads will mean that authorities will not be in a position to make as much progress as they would perhaps like. I explained to Banff education authority that I had to consider not only its programme, but all the other programmes which authorities have sent in for the period 1970 to 1972. For the first part of that period the £17 million is only part of the allocations to be made available for the two-year period. As the hon. Member said, we hoped by the end of this year to give specific allocations for the rest of the two-year period and also the allocations for 1972–73. It is likely to be a little later than I expected— some time early in the New Year—when I shall be able to give the allocations. That is for the reason that I am considering the representations made by Banffshire education authority and other representations by other authorities about the allocations they have received already for the first part of the two-year period.
I want to take all this into account before putting out the allocations for the next part of the two-year period. Once we have done that, the scope for adjustment by listening to representations by authorities, and so on, is likely to be very limited, but we must try as far as possible to get this absolutely right when we put out the new figures early in the New Year.
The hon. Member particularly raised the question of building to facilitate the reorganisation of secondary education on comprehensive lines and he quoted from Circular 600. If he looks at it again he will see that it has never been our intention to provide investment for school building on a scale which would enable all the necessary new building to be completed and adaptations to be done to existing buildings in a short time. We explained that it would not be realistic for authorities to plan on the basis that their individual programmes would be increased solely to take account of the

need to adapt or remodel existing buildings on a scale which would not have been necessary but for reorganisation. The expectation was that the large volume of secondary school building which would have to be undertaken to meet other specific needs would provide opportunities to expedite reorganisation on comprehensive lines and this has proved to be the case.
This is basically what is happening in Scotland as a whole as there is need for providing additional secondary school accommodation for the raising of the school-leaving age and demands of population, and so on, at the same time as the move to comprehensive reorganisation is going ahead. In the circular, announcing the programmes for the first three years of the current five-year programme period, it was made clear that the available investment for secondary purposes over the authority's area as a whole would determine the pace at which reorganisation could be fully and adequately implemented, and we accept that this is not peculiar to Banffshire. Some continuance of existing arrangements or only interim changes in these arrangements would be inevitable in many areas.
I accept that in this interim situation there are bound to be difficulties. I also agree that it is difficult to persuade parents and others interested that equality of opportunity is being given in a situation where there is more than one system of secondary education operating simultaneously within a fairly restricted area between one authority and another.
We have reached a stage in Banffshire with the opening of phase 1 of the new Banff Academy where full secondary education is being given to pupils from one particular part of the county, but we have yet to move towards that particularly in the Buckie area and in the area of Speyside. The hon. Gentleman said that the scheme that the authority put to us for Buckie would have cost £650,000. He also said that this is not wholly required to meet the demands of roofs-over-heads and, in particular, the demands of the raising of the school-leaving age. There are substantial elements here of secondary reorganisation involved.
In view of the other demands on the school building programme in other areas,


it is impossible for me to say that Banffshire can start a scheme of this sort, costing this amount of money, in the period 1970–72, even if there were not other projects, which the hon. Gentleman mentioned and which I know that the education authority is anxious to see started.
At the meeting which I had with the authority on 31st October, and at which the hon. Gentleman was present, I asked the authority if it would look at this project and see if it could be broken down into phases. The authority was of the view at the meeting that that would be difficult. We have since heard nothing officially from the authority, but the hon. Gentleman has given me some indication tonight of how the authority's mind is working, because he has said that it is now thinking of a scheme which, as I understood him, would cost about £¼ million and which would do what the authority considers to be absolutely essential in the interim period and omit some of the other matters which, although essential in the longer term, are not absolutely necessary for 1972.

Mr. W. H. K. Baker: It does not take account of the raising of the school-leaving age, as I understand it.

Mr. Millan: In any case, the hon. Gentleman will appreciate that, as I have not seen details of the scheme, it is not possible for me or my Department to judge it. We will examine the new scheme very carefully, because it was the understanding from our meeting that this is what the authority would do. If it has done that, we shall certainly look very carefully at what it proposes.
As to Speyside, I do not think that there is any prospect—I made this clear to the authority—of doing anything in this area in the way of starting a major project in the period up to 1972. I understand the particular difficulties in Speyside. As the hon. Gentleman knows full well, we had a long correspondence about this over a considerable period. I understand the feelings of parents and others in this area. The Speyside project is, in terms of building, strictly a replacement project. It is not strictly to provide basic accommodation for the raising of the leaving age or for any other factor.It is basically a reorganisa-

tion proposal. Because of the difficulties I have in meeting the demands on the building programme as a whole, I can see no prospect of dealing with that in the period to 1972.
The hon. Gentleman did not mention the question of an extension which will probably be necessary at Keith Grammar School, which was to cost about £80,000; but, as I think he knows, that is another scheme which we have to take into consideration in considering the priorities for the authority in the next two years.
There is also the question whether it will be possible in that period to do anything about the replacement of White-hills primary school, a project costing £90,000 which the authority considers to be the most urgent and essential project in the primary education field.
It is not possible for me to make any final pronouncement at the moment, because the allocation for the second part of the two-year period has not yet been decided for the authority, and it is, therefore, not possible to say what we shall be able to fit into the two-year period. But, as the hon. Gentleman will remember from my meeting with the education authority, in any case the key factor is the Buckie situation and what is likely to happen over the secondary school accommodation there. Only when we can see that clearly, when we can see what is possible in the way of breaking down into phases the extension which is required at Buckie High School and how much is involved, can we see the demands in the county for school building as a whole—not just in the two years up to 1972 but looking forward into the 1972–73 period. Our circular, which will be coming out at the beginning of the year, will give an indication of what might be available then. Therefore, I am not able at the moment to say much more than I said to the authority at our meeting on 31st October.
I should, however, like to make this point. There was some feeling at the meeting that I had with the authority that Banffshire had been badly dealt with compared with other areas of the country in regard to school building. That is not really so. One cannot make these comparisons simply in terms of population, but in the three-year period from


1967–70 Banffshire had a fair share on a pupil/population basis. It had over £900,000 in terms of starts including the first phase of the new Banffshire Academy, which was an expensive project, as well as the replacement of two primary schools at Cullen and Keith.
Therefore, the situation—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twelve minutes past Eleven o'clock.